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Item 1. Business

2023-03-22 compared with 2022-03-31 · 274 added, 293 removed, 558 unchanged (50% of the section changed)

We are a clinical stage biotherapeutics company focusing on advancing technologies to enable the administration of biologics orally, to provide patients, physicians, and healthcare systems with a convenient alternative to painful injections.

We are advancing a portfolio of oral biologic therapeutics using our proprietary delivery technology.

We have developed and clinically tested a drug-agnostic oral delivery platform, the RaniPill capsule, which can deliver any drug, including large molecules such as peptides, proteins, and antibodies.

The current RaniPill capsule can deliver up to a 3 mg dose of drug with high bioavailability.

We are a clinical stage biotherapeutics company focusing on advancing technologies to enable the administration of biologics and drugs orally, to provide patients, physicians, and healthcare systems with a convenient alternative to painful injections.

We are advancing a portfolio of oral therapeutics using our proprietary delivery technology.

We are developing and clinically testing a drug-agnostic oral delivery platform, the RaniPill capsule, which is designed to deliver a wide variety of drug substances, including large molecules such as peptides, proteins, and antibodies.

The current RaniPill capsule, the RaniPill GO, is designed to deliver up to a 3 mg dose of drug with high bioavailability.

We are also developing a high-capacity version known as the RaniPill HC, which is in preclinical stage and which is intended to enable delivery of drug payloads up to 20 mg with high bioavailability.

Our current RaniPill capsule is optimized to orally deliver a variety of biologic therapeutics, and we are advancing development of the RaniPill HC to address biologics with higher dosing requirements.

Together, we believe that the current RaniPill capsule and RaniPill HC could enable us to deliver most biologics currently on the market via a convenient, oral daily dose.

We believe that our drug-agnostic and high bioavailability oral delivery technology positions us to be the leader in oral biologics.

In March 2022, we initiated a phase 1 clinical trial with RT-102, a RaniPill capsule containing our proprietary formulation of parathyroid hormone (“PTH”), in Australia.

The study will compare pharmacokinetics of PTH administered via RaniPill capsule to PTH administered via subcutaneous injection.

We previously completed a phase 1 clinical study with RT-101, a RaniPill capsule containing our proprietary formulation of octreotide, in Australia.

The phase 1 study successfully achieved both its primary and secondary endpoints, demonstrating the safety and tolerability of RT-101 and achieving oral bioavailability of octreotide greater than 70%.

No serious adverse events were reported .

Market segment and technology

The RaniPill GO is optimized to orally deliver a variety of therapeutics, and we are advancing development of the RaniPill HC to address biologics and drugs with higher dosing requirements.

We believe that, together, the RaniPill GO and RaniPill HC could enable us to deliver most biologics currently on the market via a convenient, oral daily dose.

Data Overview

We have completed two Phase 1 clinical trials with the RaniPill capsule technology.

In 2022, we completed a Phase 1 clinical trial with RT-102, a RaniPill GO capsule containing our proprietary formulation of parathyroid hormone (1-34) (“PTH”), in Australia.

The study involved a single-ascending dose portion and a seven-day repeat-dose portion.

The Phase 1 study met all of its endpoints, RT-102 was well tolerated and delivered PTH with high bioavailability (more than 300% greater bioavailability than subcutaneous injection of Forteo (teriparatide)).

No serious adverse events were reported in the study.

In 2019, we completed a Phase 1 study with RT-101, a RaniPill GO capsule containing our proprietary formulation of octreotide, in Australia.

The Phase 1 study met all of its endpoints, RT-101 was well tolerated and delivered octreotide with high bioavailability (comparable to subcutaneous injection of octreotide).

No serious adverse events were reported in the study.

As of December 31, 2022, we have administered the RaniPill capsule 185 times to 98 human subjects in clinical trials, including seven-day repeat-dosing in ten subjects in our Phase 1 study of RT-102.

This is in addition to oral administrations of the RaniPill capsule, without a drug or needle, in non-significant risk studies.

In our clinical studies, our product candidates were generally well tolerated and no serious adverse events were observed.

Preclinically, we have tested 12 molecules in the RaniPill capsule, including five antibodies, six peptides and one large protein.

We have conducted preclinical testing of more than 1,700 RaniPill capsules in vitro and more than 1,300 RaniPill capsules in vivo, including two good laboratory practice (“GLP”) seven-day repeat-dose studies which supported advancement of our product candidates, RT-101 and RT-102, into clinical studies.

Pipeline Overview

The broad utility of the RaniPill capsule to enable the oral delivery of biologics provides us with a range of attractive development opportunities.

We have prioritized development based on specific scientific, developmental, regulatory, and commercial considerations to optimize our portfolio of targeted product candidates.

Our internal development targets are focused on well-characterized molecules with attractive commercial characteristics.

We believe selection of these targets will allow us to potentially accelerate product approval and market launch, while also broadening patient, provider, and payor acceptance of the RaniPill capsule.

Below is a summary of our product candidate pipeline.

We envision complementing these programs with robust partnering activities to maximize the value inherent in the RaniPill capsule.

RT-XXX refers to the RaniPill capsule containing a biologic or drug.

* Clinical timelines are subject to potential regulatory agency review delays.

** Each of these indications will require separate regulatory approvals.

*** Partnered with Celltrion, Inc.

Celltrion, Inc.

supplies ustekinumab pursuant to a license and supply agreement and has a right of first negotiation for development and commercial rights following completion of a Phase 1 clinical trial that meets its primary endpoint(s).

Clinical Update

In August 2022, we announced positive topline results from Part 1 (“Study Part 1”) of the Phase 1 study of RT-102, which is being developed for the potential treatment of osteoporosis.

The study met all of its endpoints and RT-102 was generally well tolerated.

In the study, RT-102 orally delivered 20 µg and 80 µg of PTH with 300-400% greater bioavailability than subcutaneous Forteo (teriparatide) 20 µg.

In December 2022, we announced positive topline results from Part 2 (“Study Part 2”) of the Phase 1 study of RT-102.

The study met all of its endpoints.

The study evaluated the safety and tolerability of once-daily administration of RT-102 containing 20 µg of PTH given repeatedly for seven consecutive days in ten healthy female volunteers.

RT-102 was well tolerated with no serious adverse events noted, and delivered 20 µg of PTH with high bioavailability, confirming the high bioavailability observed in Study Part 1.

Study Part 1 - Topline Results

The single-center, open label, Study Part 1 was conducted in Australia.

The study evaluated the safety, tolerability, and pharmacokinetics (“PK”) of RT-102 in healthy adult female volunteers.

Of the 39 participants, 15 were administered RT-102 containing a single 20 μg dose of PTH and 14 were administered RT-102 containing a single 80 μg dose of PTH, while a control group of ten participants received a single 20 μg subcutaneous injection (SC) of Forteo (teriparatide), a commercial formulation of PTH for subcutaneous (“SC”) administration.

The endpoints of the study were safety and tolerability, and measurements of serum concentrations of RT-102 in healthy adult female volunteers.

In Study Part 1, RT-102 was generally well tolerated, with no RaniPill-related adverse events (“AEs”) observed in study participants:

o 0% (0/15) of participants dosed with RT-102 20 μg experienced drug-related AEs.

o 14% (2/14) of participants dosed with of RT-102 80 μg experienced drug-related AEs.

o 50% (5/10) of participants dosed with 20 μg of Forteo SC experienced drug-related AEs.

o There were no serious adverse events (“SAEs”) noted during Study Part 1.

Per protocol, in instances where the RaniPill capsule did not exit the stomach within seven hours, participants were excluded from the study.

Based on the exclusion criteria, three participants were excluded from Study Part 1, one of whom experienced bloating, and one additional subject was excluded due to vomiting the capsule intact.

In all instances, the capsule remnants passed from all participants who ingested the RaniPill capsule.

Pharmacokinetics

In Study Part 1, RT-102 (20 μg and 80 μg) orally delivered PTH with 300%-400% greater bioavailability than PTH delivered by Forteo SC (20 μg).

RT-102 20 μg delivered PTH with lower, more sustained peak serum levels and higher area under the curve (“AUC”) than Forteo SC 20 μg.

Forteo SC 20 μg

RT-102 20 μg

RT-102 80 μg

AUC (h*pg/mL)

Relative BA (5)

Device Performance

Two versions of the RaniPill capsule were used during Study Part 1:

Version C, which was used in Rani’s prior Phase 1 study of octreotide (which also utilized a Version A and Version B);

and Version D, the latest iteration of the RaniPill capsule.

RaniPill Version D demonstrated a higher drug delivery success rate than Version C:

95% (20/21) of participants received successful drug delivery when ingesting RaniPill Version D.

75% (6/8) of participants received successful drug delivery when ingesting RaniPill Version C.

The device performance analysis does not include participants excluded from the study per protocol, as drug delivery was not measured in such participants.

Study Part 2 - Topline Results

Study Part 2 was a continuation of Rani’s single-center, open-label Phase 1 study of RT-102 conducted in Australia.

The study evaluated the safety and tolerability of once-daily administration of RT-102 containing 20 μg of PTH given repeatedly for seven consecutive days in ten healthy female volunteers (five of whom were post-menopausal).

Complete pharmacokinetic profiles of PTH were obtained for each subject on Day 7.

RT-102 was generally well tolerated, with no serious adverse events noted during the study

o None of the participants withdrew from the repeat-dose study due to any adverse event related to the RaniPill capsule or due to difficulty swallowing the capsule

o Two subjects had transient, mild-to-moderate adverse events which resolved without any intervention

Device remnants were excreted without sequelae in all subjects

Pharmacokinetics

RT-102 delivered 20 µg of PTH with high bioavailability (relative to 20 µg SC Forteo (teriparatide) in Study Part 1), confirming the high bioavailability of PTH delivered via the RaniPill capsule observed during Study Part 1.

Device Performance

In all ten participants who completed seven days of daily, consecutive dosing, the RaniPill capsule demonstrated an overall drug delivery success rate of 91% over the seven days (drug sampling was done at three, six and nine hours after capsule swallowing on Days 1-6).

On Day 7, with more frequent, serial drug sampling after capsule swallowing on that day, the drug delivery success rate was 100%.

On Days 1 through 6, participants ate food three hours after administration of the RaniPill capsule.

The number of successful deployments was comparable before and after food was consumed.

In January 2023, Rani announced that it completed a pre-IND meeting with the FDA with respect to RT-102.

Following feedback from the meeting, Rani believes that a 505(b)(2) pathway is suitable for the development of RT-102 in the U.S.

In addition, Rani obtained guidance from the FDA on its preclinical and clinical development plans for RT-102, including the Phase 2 clinical trial which is expected to initiate in the second half of 2023.

Pharmacodynamics - Rodent Study

We also conducted a 6-week pharmacodynamic (“PD”) study of the RT-102 drug substance (“DS”) PTH (1-34) to evaluate the effect of daily RT-102 DS intraperitoneal (“IP”) injections on bone mineral density (“BMD”) in a rodent model of osteoporosis.

The study compared two control groups of rodents undergoing sham surgery (N=10) and ovariectomy (“OVX”) (N=10) receiving no drug, to three OVX groups each dosed with 5 mcg/kg per day of either RT-102 DS (N=10), teriparatide (N=10), or abaloparatide (N=10).

The study found that, following six weeks of treatment:

RT-102 DS increased BMD in a rat model of osteoporosis.

RT-102 DS delivered via the IP route of administration was biologically active comparable to SC injected PTH analogs.

In October 2022, we announced that we had begun preclinical development with RT-111, the RaniPill capsule containing an ustekinumab biosimilar.

In January 2023, we announced entering 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) (the “Celltrion Agreement”).

We continue to develop the RaniPill HC, a high-capacity RaniPill capsule designed to deliver drug payloads up to 20 mg, 500%-plus higher than the payload capacity of the RaniPill GO.

We are conducting preclinical studies with a fully-autonomous RaniPill HC.

Following a strategic priority review in 2022, we decided not to continue active development of RT-109, a RaniPill capsule containing human growth hormone.

We remain open to partnering opportunities with respect to RT-109, but intend to focus internal efforts on our other pipeline programs.

The Market and Our Strategy

More than half of the adult population of the U.S.

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The affected population is expected to continue to grow as the population ages.

Chronic conditions, including cancers, cardiovascular diseases, autoimmune diseases, and metabolic disorders, are increasingly being treated with biologics.

Chronic conditions, including autoimmune diseases, metabolic disorders, cancers, and cardiovascular diseases are increasingly being treated with biologics.

In 2021, six of the ten highest revenue-producing drugs in the world were biologics.

Current treatments using biologics are primarily via injection.

Current treatments using biologics are primarily via injections.

Biologics, the fastest growing segment of the drug industry, refers to a broad class of drugs that are derived from living sources.

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Attempts at oral delivery of biotherapeutics have remained largely unsuccessful due to the rapid degradation and digestion of biologics in the gastrointestinal (“GI”) environment before they can be absorbed into the bloodstream.

Our solution is our novel, proprietary and patented platform technology referred to as the RaniPill capsule, an orally ingestible pill designed to automatically deploy in the small intestine to administer a precise therapeutic dose of a biologic into the intestinal wall.

Our several preclinical studies and clinical trials have demonstrated bioavailability of dosing via the RaniPill capsule that is generally comparable to dosing subcutaneously, with high dosing accuracy:

Our solution is a novel, proprietary and patented platform technology referred to as the RaniPill capsule, an orally ingestible pill designed to automatically deploy in the small intestine to administer a precise therapeutic dose of a biologic into the intestinal wall.

Our several preclinical studies and clinical trials have demonstrated bioavailability of biologics dosed via the RaniPill capsule that is generally comparable to the bioavailability of biologics dosed subcutaneously, with high dosing accuracy:

this level of bioavailability is significantly higher than any that has been demonstrated with respect to others’

attempts at oral delivery of biologics.

We are pursuing a number of clinical and preclinical pipeline programs utilizing our current RaniPill capsule.

In addition, our newly designed high-capacity oral biologic delivery device, the RaniPill HC, has the potential to deliver 500%-plus higher payloads than our current RaniPill capsule.

We believe this is a significant breakthrough in drug delivery with the potential to provide expansive opportunities for the company, such that we could potentially pursue a daily dosing option for over 50 additional biologics, for internal development or through partnership, including such biologics as pembrolizumab, etanercept, trastuzumab and

We are pursuing a number of clinical and preclinical pipeline programs utilizing our RaniPill capsule.

In addition, our newly designed high-capacity oral biologic delivery device, the RaniPill HC, has the potential to deliver 500%-plus higher payloads than our current RaniPill GO capsule.

We believe that oral biologics utilizing our RaniPill technology have the potential to disrupt the large and growing biologics market.

Organizational Transactions

Rani Holdings was formed as a Delaware corporation in April 2021 for the purpose of facilitating an initial public offering (“IPO”) of its Class A common stock, to facilitate certain organizational transactions, and to operate the business of Rani LLC and its consolidated subsidiary RMS.

In connection with the IPO, we established a holding company structure with Rani Holdings as a holding company and its principal asset is the Class A common units (“Class A Units”) of Rani LLC that it owns.

As the sole managing member of Rani LLC, Rani Holdings operates and controls all of Rani LLC’s operations, and through Rani LLC and its subsidiary, conducts all of Rani LLC’s business.

In connection with the IPO, we were party to the following organizational transactions (the “Organizational Transactions”):

Amended and restated Rani LLC’s operating agreement (the “Rani LLC Agreement”) to appoint Rani Holdings as the sole managing member of Rani LLC and effectuated an exchange of all outstanding interests in Rani LLC into Class A Units and an equal number of voting noneconomic Class B units.

Amended and restated our certificate of incorporation to provide for the issuance of (i) Class A common stock, each share of which entitles its holders to one vote per share, (ii) Class B common stock, each share of which entitles its holders to 10 votes per share on all matters presented to the Company's stockholders, (iii) Class C common stock, which has no voting rights, except as otherwise required by law and (iv) preferred stock.

Certain holders of Class A Units tendered their Class A Units for shares of our Class A common stock.

Certain holders of Class A Units continued to hold such Class A Units (“Continuing LLC Owners”) and received shares of our Class B common stock.

Continuing LLC Owners are entitled to exchange, subject to the terms of the Rani LLC Agreement, the Class A Units they hold in Rani LLC, together with the shares they hold of our Class B common stock (together referred to as a "Paired Interest"), in return for shares of the Company’s Class A common stock on a one-for-one basis provided that, at our election, we may effect a direct exchange of such Class A common stock or make a cash payment equal to a volume weighted average market price of one share of Class A common stock for each Paired Interest redeemed.

Any shares of Class B common stock will be cancelled on a one-for-one basis if we, at the election of the Continuing LLC Owners, redeem or exchange such Paired Interest pursuant to the terms of the Rani LLC Agreement.

Entered into a registration rights agreement and tax receivable agreement (“Tax Receivable Agreement”

or “TRA”) with certain of the Continuing LLC Owners.

Our strategic vision is to disrupt and expand the approximately $269.0 billion market currently served by injectable only therapeutic biologics.

We plan to do this by developing and advancing oral biologics therapies.

We are committed to delivering oral biologic solutions for patients living with burdensome chronic diseases.

We believe that the RaniPill capsule will improve the lives of millions of patients with chronic diseases who currently depend on biologics available only as injections.

Our strategic vision is to disrupt and expand the market currently served by injectable only therapeutic biologics.

We plan to do this by developing and advancing oral biologics therapies, directly ourselves and through partnering.

We believe that the RaniPill capsule has the potential to improve the lives of millions of patients with chronic diseases who currently depend on biologics and drugs available only as injections.

Our strategy includes the following aspects.

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We believe that these products will take market share from available therapies, while also expanding existing markets by reaching new patient populations that otherwise are not being treated by injectable biologics.

Establish the RaniPill capsule as a platform technology with regulatory authorities .

We plan to demonstrate the safety and tolerability of the RaniPill capsule through clinical trials independent of any biologic.

Data from these studies will be used to support subsequent regulatory applications for our product candidates.

Expand in-house manufacturing of the RaniPill capsule.

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Our clinically tested RaniPill delivery platform described below is intended to be capable of delivering up to a 3 mg dose of any drug.

We are also developing a high-capacity version known as the RaniPill HC, which is in preclinical stage and which is intended to enable delivery of drug payloads up to 20 mg.

We are also developing a high-capacity version known as the RaniPill HC, and which is intended to enable delivery of drug payloads up to 20 mg and is in preclinical testing stage.

The RaniPill capsule

The RaniPill capsule is a versatile, drug-agnostic, orally ingestible pill approximately the size of a fish oil or calcium pill or a ‘000’-sized capsule.

RaniPill capsule in purple next to fish oil pills (gold) and calcium pills (white).

The capsule includes a proprietary coating designed to withstand stomach acid but dissolve in the jejunum portion of the small intestine.

Dissolution of the coating leads to a series of steps that result in a biologic being delivered into the highly vascularized wall of the small intestine so that the biologic can be absorbed into the vasculature and enter the bloodstream.

The following illustrations depict the clinically tested RaniPill capsule traversing through and deploying within a lumen of the intestine illustrated in cross section.

The following illustrations depict the clinically tested RaniPill GO capsule traversing through and deploying within a lumen of the intestine illustrated in cross section.

As the RaniPill capsule exits the stomach and enters the small intestine, the higher pH environment of around 6.5 in the jejunum begins to dissolve the coating.

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High bioavailability and high dosing accuracy –

Our studies conducted to date have demonstrated that the RaniPill capsule delivers biologics with bioavailability that is generally comparable to dosing subcutaneously, with high dosing accuracy.

Our studies conducted to date have demonstrated that the RaniPill capsule delivers biologics with bioavailability that is generally comparable to subcutaneous injection, with high dosing accuracy.

This level of bioavailability is similar to subcutaneous injection and is significantly higher than that of currently marketed chemistry-based oral biologics, the best attempts of which to our awareness have resulted in peptides being delivered with only low single-digit bioavailability.

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Delivery of the microneedle in both fed and fasted states –

The RaniPill capsule is designed to deliver the microneedle even if the patient ingests the RaniPill capsule with or after a meal, which we expect will allow for more flexible dosing regimens and improved patient adherence to a given regimen.

The RaniPill capsule is designed to deliver the microneedle even if the patient ingests the RaniPill capsule with or without food, which we expect will allow for more flexible dosing regimens and improved patient adherence to a given regimen.

Self-inflating balloon ensures reliable delivery –

The proprietary self-inflating balloon is designed to provide optimal pressure to deliver the microneedle.

In addition, the novel design of the balloon positions the microneedle

approximately perpendicular to the intestinal wall for reliable drug delivery, with up to 80% drug delivery success observed in our clinical trial of RT-101.

In addition, the novel design of the balloon positions the microneedle approximately perpendicular to the intestinal wall for reliable drug delivery, with greater than 90% drug delivery success observed in our Phase 1 clinical trial of RT-102.

The self-inflating balloon has been designed to minimize GI discomfort.

Drug-agnostic design provides a standardized platform –

The RaniPill capsule is designed to deliver any molecule irrespective of molecular mass.

The RaniPill capsule is designed to deliver any molecule irrespective of its molecular mass.

This allows a single platform design to be used with multiple drugs.

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Based on the confirmed patient preference for oral delivery alternatives, we expect better treatment adherence with oral dosing versus injections, thus enabling a more physician-selectable dosing regimen.

For example, the RaniPill capsule may enable a regimen of small daily doses, versus larger less-frequent doses for injections prescribed to improve treatment adherence;

small daily dosing may allow for therapeutic exposures to be maintained within a narrow range, whereas larger less frequent injection dosing can lead to large variations in therapeutic exposure, which can directly contribute to adverse events, loss of efficacy, and increased propensity for immunogenic response.

Studies underscoring the advantages of the RaniPill capsule

For example, the RaniPill capsule may enable a regimen of small daily doses, versus larger less-frequent doses for injections, to improve treatment adherence.

In addition, small daily dosing may allow for therapeutic exposures to be maintained within a narrow range, whereas larger less frequent injection dosing can lead to large variations in therapeutic exposure, which can directly contribute to adverse events, loss of efficacy, and increased propensity for immunogenic response.

Platform study in humans confirming reliable deployment in fed and fasted states

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No volunteers reported difficulty in swallowing the capsule, nor did any study participant report experiencing pain or sensing an awareness upon balloon deployment.

Patient and physician survey indicating strong preference for pills over injections even for infrequent dosing

We commissioned an independent third-party survey to investigate United States patient and physician preference for oral medications versus injections.

The results clearly indicated that both patients and prescribing physicians would prefer pills to injections over a broad base of patient populations and treatment regimens.

The results also indicate that a majority of physicians would be likely to prescribe an oral regimen as a first line therapy.

Across all patient groups, genders, ages, conditions treated, and severity of condition, there was a consistently strong preference for switching from injections to pills, even for infrequent injection regimens of up to six months.

The 611 responding patients were aged 18 years or older and presently using an injectable biologic to treat a condition.

Six patient groups each included 100-103 patients with current primary treatment being injections of Simponi, Entyvio, Stelara, Prolia, Evenity, or Cosentyx.

The 201 responding physicians, mostly endocrinologists and rheumatologists, were presently prescribing injectable biologics to their patients.

The physicians answered questions regarding the biologics listed with respect to the patient groups as well as five additional biologics (Natpara, Forteo, Tymlos, Norditropin, and Genotropin).

The results of this extensive patient preference survey across a large and varied patient population are consistent with the results obtained from our prior patient preference survey showing, for example, that 88% of rheumatoid arthritis patients taking Humira injections once every two weeks would prefer a daily pill and 76% of patients taking Prolia once every six months would prefer a daily pill.

In each patient group surveyed, at least 64% of respondents would prefer a daily pill to their current injectable treatment regimen.

Repeat-dose studies

We have conducted two seven-day repeat-dose studies in canines under GLP guidelines, with no safety issues or adverse events observed.

These studies indicate the potential for safe, daily dosing with the RaniPill capsule.

The broad utility of the RaniPill capsule to enable the oral delivery of biologics reliably provides us with a range of attractive development opportunities.

We have prioritized development based on specific scientific, developmental, regulatory, and commercial considerations to optimize our portfolio of targeted product candidates.

Our internal development targets are focused on well-characterized molecules with attractive commercial characteristics.

We have tested the RaniPill capsule with several biologics, in numerous preclinical studies.

In March 2022, we initiated testing of RT-102 in a Phase 1 clinical trial in Australia.

Previously, we completed a Phase 1 clinical trial of RT-101 in Australia.

Below is a summary of our product candidate pipeline.

We believe these drugs are compatible with our technology based on their dosage and dosing schedule.

Most importantly, if clinical testing proves successful and our product candidates are approved by regulatory authorities, these products would give millions of patients a convenient, oral option to effectively manage their diseases.

We may complement these programs with robust partnering activities to maximize the value inherent in the RaniPill capsule.

RT-XXX refers to the RaniPill capsule containing a biologic in a proprietary Rani formulation.

* Each of these indications will require separate regulatory approvals.

**Changchun High & New Technology Industries will have a limited opportunity to negotiate for rights within China.

*** Timelines are subject to regulatory agency review delays.

Our Pipeline Programs

Octreotide for the treatment of NETs and acromegaly

Market overview and currently approved products

Market overview

Octreotide, developed by Novartis AG and sold under the brand name Sandostatin®, is a truncated and modified form of the human somatostatin.

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Octreotide is a more potent mimetic with a significantly longer half-life than naturally occurring somatostatin.

Octreotide is currently approved by the FDA and EMA for the symptomatic treatment of acromegaly, a disorder involving the secretion of excessive growth hormone, as well as carcinoid syndrome, a condition involving NETs of the GI tract.

Current treatment using octreotide involves painful subcutaneous injections administered three to four times daily or an extended-release formulation via painful, deep intramuscular injections every four weeks.

Despite the inconvenience of the current route of administration, the worldwide market for octreotide in 2020 was approximately $2.7 billion.

A chemistry-based attempt to develop an oral version of octreotide for treatment of acromegaly (MYCAPSSA from Amryt Pharma) resulted in a product with less than 1% bioavailability, which, due to this low bioavailability, was approved only for maintenance therapy of acromegaly patients on a low (100 µg) dose.

A chemistry-based attempt to develop an oral version of octreotide for treatment of acromegaly (MYCAPSSA from Amryt Pharma Plc) resulted in a product with less than 1% bioavailability, which, due to this low bioavailability, was approved only for maintenance therapy of acromegaly patients on a low (100 µg) dose.

The total patient population of NETs and acromegaly in the United States is estimated to be around 200,000.

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Our solution:

We are developing RT-101, the RaniPill capsule containing our novel formulation of octreotide, for oral treatment of NETs and acromegaly.

We are developing RT-101, the RaniPill capsule containing a novel formulation of octreotide, for oral treatment of NETs and acromegaly.

We have worldwide commercial rights to RT-101.

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RT-101 Pharmacokinetic study

Pharmacokinetic (“PK”) profiles of octreotide delivered as RT-101 were obtained in conscious beagles, and compared to that of an equivalent IV dose of the commercially available product, Sandostatin®.

Pharmacokinetic profiles of octreotide delivered as RT-101 were obtained in conscious canines, and compared to that of an equivalent intravenous (“IV”) dose of the commercially available product, Sandostatin.

All animals receiving RT-101 tolerated the oral administration of the capsule.

For the RT-101 group, the average maximum concentration (“Cmax”) was 9.9 ±

1.2 ng/ml and average Tmax for the group was 22 ±

1.2 ng/ml and average time to maximum concentration (“Tmax”) for the group was 22 ±

3 minutes after payload delivery.

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The GI tract was critically evaluated in all animals and no significant macroscopic or microscopic abnormalities were observed in any animal.

These results demonstrated that the RaniPill capsule can be consumed on a daily basis for seven days, deploy within the targeted region of the small intestine without causing any adverse clinical effects, and remnants can be excreted without complications.

These results demonstrated that the RaniPill capsule can be consumed on a daily basis for seven days, deploys within the targeted region of the small intestine without causing any adverse clinical effects, and remnants get excreted without complications.

Clinical trials

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To date, the best published bioavailability for oral octreotide is approximately 1%.

The results of the RT-101 Phase 1 clinical trial support

the utility of the RaniPill capsule to deliver octreotide orally, and at levels of octreotide comparable to subcutaneous injection.

The results of the RT-101 Phase 1 clinical trial support the utility of the RaniPill capsule to deliver octreotide orally, and at levels of octreotide comparable to subcutaneous injection.

In addition, the results indicate that the RaniPill capsule may be used for other biologics.

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Once optimized, we will test and verify the formulation in appropriate animal models.

Once the formulation is validated in preclinical studies, we plan to initiate clinical trials for the development of RT-101.

Once the formulation is validated, we plan to initiate additional clinical trials for the development of RT-101.

Parathyroid hormone (PTH) for the treatment of osteoporosis

Market overview and currently approved products

Market overview

Osteoporosis is a bone disease where bone mineral density and bone mass decreases, leading to a decrease in bone strength that can increase the risk of fractures.

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PTH is a hormone secreted by the parathyroid glands that regulates serum calcium concentration and promotes bone growth.

PTH therapies are delivered by daily subcutaneous injections for up to 2 years.

Approximately 10 million Americans suffer from osteoporosis;

PTH therapies are delivered by daily subcutaneous injections for up to two years.

Approximately ten million Americans suffer from osteoporosis;

however, we estimate that only a small fraction of this population is being treated with a form of PTH.

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Dose escalation study

We conducted a preclinical study with RT-102 where PK of PTH was determined in awake beagles at varying dosage levels of teriparatide formulation.

We conducted a preclinical study with RT-102 where PK of PTH was determined in awake canines at varying dosage levels of teriparatide formulation.

Reference PK curves were also generated using Forteo administered at the approved dose and route of delivery of 20 µg subcutaneous liquid injection.

Results of this study in terms of concentration-time profiles of hPTH(1-34) are provided in the following graph.

RT-102 yielded steep increases in concentration of PTH followed by a rapid decline to baseline levels, similar to the subcutaneous controls.

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RT-102 was well tolerated by all animals with no significant adverse events noted at any of the doses tested.

Pharmacodynamics - rodent study

We conducted a 6-week pharmacodynamic study of the RT-102 drug substance PTH (1-34) to evaluate the effect of daily RT-102 DS intraperitoneal injections on bone mineral density in a rodent model of osteoporosis.

The study compared two control groups of rodents undergoing sham surgery (N=10) and ovariectomy (N=10) receiving no drug, to three OVX groups each dosed with 5 mcg/kg per day of either RT-102 DS (N=10), teriparatide (N=10), or abaloparatide (N=10).

The study found that, following six weeks of treatment:

RT-102 DS increased BMD in a rat model of osteoporosis.

RT-102 DS delivered via the IP route of administration was biologically active comparable to SC injected PTH analogs.

Seven-day, repeat-dose GLP study with RT-102

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Clinical trials

In March 2022, we initiated a Phase 1 clinical trial of RT-102 in Australia.

The single-center, open label, Phase 1 study will evaluate the pharmacokinetics, safety, and tolerability of parathyroid hormone administered via the RaniPill capsule in healthy adult women volunteers.

RT-102 will be ingested orally, administering a single dose of parathyroid hormone.

Doses given will range from 20 to 80 μg.

In 2022, we completed a Phase 1 clinical trial with RT-102 in Australia.

The study involved a single-ascending dose portion and a seven-day repeat-dose portion.

The Phase 1 study met all of its endpoints, RT-102 was well tolerated and delivery achieved high bioavailability (more than 300% greater bioavailability than subcutaneous injection).

No serious adverse events were reported in the study.

See the section entitled “Clinical Update –

RT-102”

above for more information on the Phase 1 study of RT-102.

We plan to initiate a Phase 2 clinical trial of RT-102 in the second half of 2023.

Anti-TNF-alpha antibody for the treatment of psoriatic arthritis

Market overview and currently approved products

Market overview

Anti-TNF-alpha antibodies such as adalimumab are used to treat a range of inflammatory disorders and are among the largest selling class of pharmaceutical drugs globally as measured by revenue.

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Adalimumab is approved by the FDA and EMA to treat a range of autoimmune conditions, including psoriasis, rheumatoid arthritis, and Crohn’s disease.

alone, there are an estimated 1.5 million patients with rheumatoid arthritis, 7 million with psoriasis, and 3 million with Crohn’s disease or ulcerative colitis.

Currently, six Humira biosimilars have been approved by the FDA, but will not enter the U.S.

market until 2023, per licensing agreements with the originator.

Patients who use adalimumab administer the drug through a painful subcutaneous injection once every two weeks.

alone, there are an estimated one and one-half million patients with rheumatoid arthritis, seven million with psoriasis, and three million with Crohn’s disease or ulcerative colitis.

Currently, eight Humira biosimilars have been approved by the FDA, and are expected to enter the U.S.

market over the course of 2023, prevented from entering earlier per licensing agreements with the originator.

Patients who use adalimumab administer the drug through a subcutaneous injection once every two weeks.

Despite the painful injections required to administer it, adalimumab was the best-selling drug globally in 2020.

Our solution:

We are developing RT-105, the RaniPill capsule containing our novel formulation of adalimumab, for oral treatment of a host of inflammatory conditions, beginning with treatment of psoriatic arthritis and later expanding to other indications for which TNF-alpha inhibitors are approved.

We are developing RT-105, the RaniPill capsule containing a formulation of adalimumab, for oral treatment of a host of inflammatory conditions, beginning with treatment of psoriatic arthritis and later expanding to other indications for which TNF-alpha inhibitors are approved.

We have worldwide commercial rights to RT-105.

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To assess whether the observations from preclinical studies regarding absorption of adalimumab through the intestinal wall translate to clinical trials, we conducted an endoscopic study in humans.

The study involved 10 healthy volunteers and compared the PK of an approved formulation of adalimumab injected endoscopically into the jejunal intestinal wall, which mimics the RaniPill capsule route of administration, to that of an identical dose injected subcutaneously.

The study involved ten healthy volunteers and compared the PK of an approved formulation of adalimumab injected endoscopically into the jejunal intestinal wall, which mimics the RaniPill capsule route of administration, to that of an identical dose injected subcutaneously.

Blood samples were obtained at prescribed intervals during a 14-day study period.

PK profiles were similar with no notable differences observed in either area under curve (“AUC”) or Cmax.

PK profiles were similar with no notable differences observed in either AUC or Cmax.

The mean AUC was 62.7 ±

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29.0 µg/ml*day*kg/mg for the intrajejunal group.

No serious adverse events were noted in this study, and adverse events of headache and flu-like symptoms after intrajejunal administration resolved within 48 hours.

No serious adverse events

were noted in this study, and adverse events of headache and flu-like symptoms after intrajejunal administration resolved within 48 hours.

The results are consistent with data obtained in preclinical studies, confirming intrajejunal delivery as a viable route of delivery for adalimumab.

We plan to initiate a Phase 1 clinical trial of RT-105 in healthy volunteers in 2023.

Human growth hormone (hGH) for the treatment of growth hormone deficiency

Market overview and currently approved products

Juvenile growth disorders and adult growth hormone deficiency affect between 30,000 and 80,000 people in the U.S.

Growth hormone is a peptide that is secreted by the pituitary gland and promotes cell growth, proliferation, and regeneration.

This anabolic hormone also stimulates insulin-like growth factor 1 which has growth enhancing effects on a broad set of tissues.

HGH is approved by the FDA for the treatment of growth hormone deficiency.

A recombinant form of hGH is used to treat juvenile growth disorders and adult growth hormone deficiency.

Treatment involves painful daily subcutaneous hGH injections often over multiple years.

Genentech, Inc., now part of Roche Holding AG, pioneered the use of recombinant hGH, receiving FDA approval for its commercial sale in 1985.

HGH is currently available from a number of sources and is sold by Eli Lilly and Company under the brand name Humatrope and by Genentech, Inc.

under the brand name Nutropin.

Worldwide sales of hGH were approximately $3.9 billion in 2020 and are projected to reach $9.2 billion by 2030.

Our solution:

We are developing RT-109, the RaniPill capsule containing our novel formulation of hGH, for oral treatment of growth hormone deficiency.

We have worldwide commercial rights to RT-109.

We have entered into an Evaluation and First Right of Refusal Agreement with Changchun High & New Technology Industries (“CCHN”), which includes limited rights to negotiate commercialization rights for RT-109 in China.

Because patients typically need daily injections of hGH over several years, we believe that a once-daily oral version would transform treatment regimens for both pediatric and adult patients.

Preclinical studies

We are conducting preclinical PK studies with RT-109.

Clinical trials

We plan to initiate a Phase 1 clinical trial in healthy volunteers in the second half of 2022.

PTH for the treatment of hypoparathyroidism

Market overview and currently approved products

Market overview

Hypoparathyroidism is a rare condition of low levels of serum PTH resulting in low calcium levels in the blood.

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Preclinical studies

We are creating a sustained release formulation of RT-110 which will provide for continuous exposures of the hormone required to normalize the calcium imbalance in hypoparathyroidism patients.

We are creating a sustained release formulation of RT-110 which is intended to provide continuous exposures of the hormone required to normalize the calcium imbalance in hypoparathyroidism patients.

We plan to conduct preclinical PK studies of RT-110 prior to initiating human clinical studies.

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We plan to initiate a Phase 1 clinical trial in healthy volunteers in 2023.

Collaboration Opportunities

We envision complementing our core programs with robust partnering activities to maximize the value inherent in the RaniPill capsule.

One market segment for which we believe that the RaniPill capsule can add significant value is the treatment of diabetes.

The CDC estimates that approximately 10% of the U.S.

population have diabetes.

Of these, 90% to 95% suffer from Type 2 diabetes, which is characterized by progressive hyperinsulinemia (pre-diabetes or insulin resistance) followed by hyperglycemia as a result of the body’s inability to properly respond to insulin and, eventually, produce sufficient insulin.

Diabetes has no known cure and can give rise to a host of serious and often life-threatening complications, including cardiovascular disease, neuropathy, retinopathy, cognitive impairment, and stroke.

This results in estimated economic costs totaling over $300.0 billion in the United States annually.

Further, according to the CDC, about a third of Americans are pre-diabetic, a health condition in which blood glucose levels are higher than normal for long periods as a result of progressing insulin resistance.

In addition to the potential of the RaniPill capsule to replace treatment by injections, we believe that an oral treatment option could be adopted earlier in the treatment of diabetes or adopted to treat pre-diabetic patients, which could result in improved outcomes in the pre-diabetic and diabetic patient populations.

Due to the size, cost, and complexity of clinical trials required to address the diabetes market, our strategy is to partner with large pharmaceutical companies to create oral versions of injected diabetes drugs, such as GLP-1 mimetics and basal insulin.

GLP-1 mimetic for the treatment of Type 2 diabetes

Market overview and currently approved products

GLP-1 mimetics are used to treat Type 2 diabetes by increasing insulin secretion and suppressing glucagon secretion.

Several large pharmaceutical companies market GLP-1 mimetics, and the global combined sales of these were estimated to be $12.7 billion in 2020.

Our solution:

We are developing RT-104, the RaniPill capsule containing our novel formulation of a GLP-1 mimetic, for oral treatment of Type 2 diabetes.

Based on a survey we commissioned, we found that 89% of endocrinologists prescribing GLP-1 mimetics were likely to switch their prescription to a once-daily pill if available, and we believe that RT-104 would be more appealing to patients than the presently available injectable form.

We have worldwide commercial rights to RT-104.

Clinical trials

Clinical study with Byetta

We conducted a proof-of-concept study in humans with Byetta, a branded form of the GLP-1 mimetic exenatide.

Five healthy subjects were dosed with Byetta via an intrajejunal injection to mimic the RT-104 route of administration and then, after a washout period, the subjects were dosed with a subcutaneous injection of Byetta.

PK profiles of exenatide were similar between subcutaneous injection and intrajejunal injection.

The AUC for intrajejunal injection was 27 ±

3 ng/ml*min and for subcutaneous injection was 23 ±

These data provide evidence that delivery of exenatide via the intrajejunal route of the RaniPill capsule will yield bioavailability similar to subcutaneous injections.

While we continue to optimize our formulation to increase drug half-life, we plan to pursue partnership opportunities with large pharmaceutical companies to further develop and commercialize RT-104.

Basal insulin for the treatment of Type 2 diabetes

Market overview and currently approved products

In addition to oral anti-diabetic drugs and lifestyle changes, patients with advanced Type 2 diabetes manage their blood sugar by administering painful daily injections including one or both types of:

(1) a single injection of a longer-acting insulin called basal insulin, which provides a steady baseline of insulin to offset insulin resistance and reduce hyperinsulinemia;

and (2) a rapid-acting insulin called mealtime insulin, which is added in the later stages of the disease and injected several times daily approximately 20 to 30 minutes before the ingestion of a meal.

Worldwide sales of basal insulin totaled an estimated $11.0 billion in 2019.

Several long-acting insulin biosimilars are available in the market today.

We expect that the market for basal insulin would further expand in the currently unserved ‘pre-diabetic’

market segment if an oral version of basal insulin were available.

Clinical research has indicated that early intervention with daily injections of basal insulin could prevent or slow down disease progression in pre-diabetic patients, as steady-state, low levels of insulin would reduce the hyperinsulinemia caused by insulin resistance.

Despite this knowledge, pre-diabetic patients currently are not prescribed basal insulin or indeed any injectable as a first-line therapy, and instead are advised lifestyle changes and are prescribed only oral anti-diabetic drugs to manage the disease.

However, in market research studies we commissioned, we found that approximately 81% of surveyed endocrinologists would initiate basal insulin therapy for diabetic patients earlier if an oral option were available and 87% of patients using insulin were likely to switch to a once-daily pill if available.

Ustekinumab for the treatment of inflammatory conditions

Market overview

Ustekinumab is currently approved by the FDA and EMA for the treatment of various inflammatory conditions under the brand name STELARA.

STELARA (ustekinumab) is an interleukin-12 and interleukin-23 antagonist marketed by Janssen Biotech, Inc.

with sales of approximately $5.9 billion in the United States and approximately $9.1 billion worldwide in 2021.

The latest expiring United States patent for STELARA (ustekinumab) will expire in September 2023.

In the United States, there were estimated to be seven million patients with psoriasis and three million patients with Crohn’s disease or ulcerative colitis in 2021.

Our solution:

We are developing RT-106, the RaniPill capsule containing our novel formulation of basal insulin, for oral treatment of Type 2 diabetes.

We have worldwide commercial rights to RT-106.

We intend to pursue partnership opportunities with large pharmaceutical companies to co-develop and commercialize RT-106.

We believe that RT-106 would have significant benefit to the millions of people living with Type 2 diabetes who presently inject longer-acting basal insulin daily.

Additionally, our RT-106 program aims to address the unserved pre-diabetic patients who would benefit from using basal insulin.

Further, because of the solid form of the drug in the RaniPill capsule, generic or rapid acting insulin can be converted to a long-acting formulation using pharmaceutical approaches, enabling additional therapeutic regimen options.

We are developing RT-111, a RaniPill capsule containing an ustekinumab biosimilar, for the treatment of various inflammatory conditions.

We entered into a License and Supply Agreement with Celltrion, under which we receive a license and supply of Celltrion’s ustekinumab biosimilar for development and commercialization worldwide, subject a right of first negotiation for Celltrion following completion of a Phase 1 clinical trial that meets its primary endpoint(s).

Preclinical studies

As a proof-of-concept to demonstrate the viability of the RaniPill capsule to deliver insulin orally, we evaluated the efficacy of rapid-acting human insulin delivered via the RaniPill capsule in a preclinical study using anesthetized juvenile swine under a euglycemic glucose clamp.

In this study, 20 IU of rapid-acting human insulin was delivered via the RaniPill capsule in one group and via subcutaneous injection in another group, and the associated PK and pharmacodynamic (“PD”) profiles compared.

Serum samples were taken at frequent intervals over a seven-hour period to quantify serum insulin levels with glucose infusion rates adjusted to maintain plasma glucose levels between 60 and 80 mg/dl (euglycemic glucose clamp).

The changes in glucose infusion rates reflect the glucose disposing action of insulin.

Results of this study demonstrate that rapid-acting insulin was successfully delivered via the RaniPill capsule, comparable to subcutaneous injection.

The AUC for delivery via RaniPill capsule was 83±

18 and AUC for subcutaneous injection was 81 ±

10 pmol/L.min.

We are currently conducting preclinical work with RT-111.

Clinical trials

We plan to initiate a Phase 1 clinical trial of RT-111 in healthy volunteers in 2023.

Our Regulatory Pathways

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regulatory pathway in this section.

In the United States, the FDA regulates biologic products such as ours under the FDCA and the PHSA and their implementing regulations.

In the United States, the FDA regulates biologic products such as ours under the Federal Food, Drug and Cosmetic Act (“FDCA”) and the Public Health Service Act (“PHSA”) and their implementing regulations.

Other jurisdictions will have somewhat different requirements.

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A biologic, if marketed without the RaniPill platform, would be classified by the FDA as either a “biological product”

regulated by the

Center for Biologics Evaluation and Research (“CBER”) or a “drug”

regulated by the Center for Biologics Evaluation and Research (“CBER”) or a “drug”

regulated by the Center for Drug Evaluation and Research (“CDER”).

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Preclinical laboratory tests, preclinical animal studies, and/or clinical trials may be ongoing concurrently for a product candidate in focused studies to assess various properties of a formulation and/or the platform of the product candidate.

Animal studies require pre-approval by an independent IRB or ethics committee.

Animal studies require pre-approval by an independent institutional review board (“IRB”) or ethics committee.

Human studies in the United States require pre-approval by the FDA.

For FDA approval of a human trial, if the trial will involve a biologic alone then an IND application will be needed, and if the trial will involve the RaniPill platform alone then an IDE application will be needed.

For a clinical trial in which the RaniPill platform will be used in combination with a biologic, we must submit an IDE application if the lead center is CDRH or an IND application if the lead center is CBER or CDER.

For the RaniPill platform used in combination with a biologic, it is expected that CBER or CDER will be the lead center.

IND and IDE applications are discussed in more detail below.

Based on discussions with the FDA, we plan to test the RaniPill platform absent a biologic and create a Master File for the platform alone which can be referred to in subsequent FDA submissions.

Master file for the RaniPill platform

Our RaniPill platform will be used across multiple products and as such, the same device information may be applicable to and used to support multiple submissions to the FDA for our combination products.

Based on discussions with the FDA and guidance we have received from CDRH and OCP, we intend to separately evaluate the safety and tolerability of the RaniPill capsule in an IDE study, absent a drug.

The IDE study is expected to confirm the safety results already obtained from the various studies we have performed, including repeat-dose GLP studies in canines.

The IDE study will evaluate the safety and tolerability of the RaniPill capsule in an eight-week healthy volunteer study (n=40) with daily administration of a RaniPill capsule absent a biologic.

The study will also evaluate the effect of food on the delivery performance of the RaniPill capsule.

After completion of the IDE study, we plan to create a Master File for the RaniPill platform with CDRH.

The Master File would include at least facilities and manufacturing procedures and controls, verification and validation reports, biocompatibility test data, GLP canine study data, and IDE clinical trial data.

A master file is not itself approved by the FDA, but rather is a mechanism to provide information regarding the device constituent part when the same information is applicable to multiple approval submissions.

The information in the RaniPill master file would be applicable to any of our product candidates and could be referenced in our IND, IDE, BLA, or NDA submissions.

Approval or license to market the RaniPill capsule

The FDA has specified a BLA path for seeking a license to market a biological product and an NDA path for seeking approval to market a drug.

The FDA has specified a BLA path for seeking a license to market a biological product and a new drug application path for seeking approval to market a drug.

It is expected that most of our product candidates will follow the BLA path while some may follow the NDA path.

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The degree to which we may be able to reduce the burden on our own development may depend on whether the API is the same as the original approved product.

Additionally, because certain products originally approved under an NDA have been reclassified by the FDA and would now follow a BLA pathway, it is unclear whether conclusions regarding such reclassified products can be leveraged in our BLA submissions.

can be leveraged in our BLA submissions.

We intend to have the scope of the leverage that will be available from already-approved biologics clarified on a product-by-product basis for each product candidate in pre-IND meetings with the FDA.

CBER and CDER may ask for additional testing for specific biologics, disease indications, or patient populations.

Additional information regarding regulatory pathways is provided in the “Government Regulation”

Additional information regarding regulatory pathways is provided in the “

Government Regulation ”

section below.

Evaluation Agreements

License and Evaluation Agreements

Celltrion license and supply agreement

In January 2023, we entered into a License and Supply Agreement with Celltrion.

Under the Celltrion Agreement, Celltrion grants us an exclusive, worldwide, royalty-free license to certain intellectual property to make, use, sell, offer for sale, import and otherwise exploit RT-111 and to use certain information to support the manufacture, development and commercialization of RT-111.

Celltrion will provide, and we will purchase, supply of ustekinumab biosimilar at supply prices set forth in the Celltrion Agreement.

We will obtain ustekiunmab biosimilar exclusively from Celltrion for the manufacture, development and commercialization of RT-111, subject to a right to obtain supply from alternative sources under certain circumstances where Celltrion experiences supply disruption.

Under the Celltrion Agreement, we have sole right to manufacture, develop and commercialize RT-111 worldwide, subject to an exclusive right of first negotiation (“ROFN”) granted to Celltrion.

Following our delivery to Celltrion of a data package consisting of topline safety information, pharmacokinetic results and device performance, and the raw data related to topline results from a Phase 1 clinical trial of RT-111 that meets its primary endpoint(s), Celltrion will have a certain period to exercise its ROFN.

If Celltrion timely exercises the ROFN, then Celltrion will have an exclusive period to negotiate in good faith a definitive agreement with us for rights to clinically develop and commercialize RT-111 in territories selected by Celltrion.

In the event Celltrion does not timely exercise the ROFN or Celltrion notifies us that it does not intend to exercise the ROFN or, after timely exercising the ROFN, notifies us that Celltrion withdraws its exercise of the ROFN, or the parties fail to enter into a definitive agreement for the development and commercialization of RT-111 within the exclusive negotiation period, then the ROFN will terminate and we will have no further obligations under the Celltrion Agreement related to a ROFN.

The Celltrion Agreement allocates rights between the parties with respect to inventions generated in performance of the agreement for the manufacture, development and commercialization of RT-111.

Celltrion will own intellectual property generated in the program solely related to its ustekinumab biosimilar.

We will own all other intellectual property generated in the program, and we grant Celltrion an exclusive, worldwide license under such intellectual property solely for use with its ustekinumab biosimilar.

We will own all data related to the research, development, manufacture, regulatory activities and commercialization of RT-111 conducted by us.

The Celltrion Agreement also contains customary representations, warranties and covenants, and mutual indemnification provisions.

We have a right to terminate the agreement for convenience subject to certain notice periods.

Celltrion has a right to terminate the agreement if we do not achieve certain development milestones, and each party has certain rights to terminate for material breach or safety concerns regarding the ustekinumab biosimilar or RT-111.

Novartis evaluation agreement

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Novartis has paid us an aggregate of $7.0 million under the Novartis Agreement as of December 31, 2022 and made an equity investment of approximately $5 million in our Series C preferred unit financing.

As part of the Organizational Transactions, the Series C preferred units were exchanged for 404,638 Paired Interests.

As part of the organizational transactions in connection with our initial public offering, the Series C preferred units were exchanged for 404,638 Paired Interests.

We do not expect any future payments under the Novartis Agreement unless we and Novartis negotiate a new agreement constructed around a higher-capacity payload system.

Takeda evaluation agreement

In November 2017, we entered into an Evaluation and First Rights Agreement (the “Takeda Agreement”) with Shire International GmbH, which was subsequently acquired by Takeda Pharmaceutical Company Limited (“Takeda”).

This agreement is now terminated.

Changchun High & New Technology Industries evaluation agreement

In August 2017, we entered into an Evaluation and Right of First Refusal Agreement, or the CCHN Agreement, with CCHN in which we agreed to perform and share data from preclinical testing of RT-109.

We will provide CCHN with reports and data resulting from our performance of our preclinical testing and CCHN will have a non-exclusive right to use this information in connection with specified activities.

CCHN will own intellectual property generated under the CCHN Agreement that comprises of or relates to certain materials and assays provided by CCHN and we will own all other intellectual property generated under the CCHN Agreement.

Following the completion of the evaluation program, we and CCHN will negotiate, for a period of 90 days, an agreement to provide CCHN with commercial rights for RT-109 in China.

In August 2017, we entered into an Evaluation and Right of First Refusal Agreement with Changchun High & New Technology Industries (“CCHN”) in which we agreed to perform and share data from preclinical testing of RT-109 (the “CCHN Agreement”).

We provided CCHN with reports and data resulting from our performance of our preclinical testing.

CCHN has a non-exclusive right to use this information in connection with specified activities.

CCHN owns intellectual property generated under the CCHN Agreement that comprises of or relates to certain materials and assays provided by CCHN and we own all other intellectual property generated under the CCHN Agreement.

Following completion of the evaluation program under the CCHN Agreement, CCHN has a right to negotiate, for a period of 90 days, an agreement to provide CCHN with commercial rights for RT-109 in China.

Additionally, we granted CCHN a right of first refusal with respect to commercial rights for RT-109 in China for a period of two years following the completion of our preclinical testing, pursuant to which CCHN will have a period of 90 days following our receipt of a third-party proposal for commercial rights for RT-109 in China to make a competing offer for such rights.

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notice, and we and CCHN may terminate for the other party’s material uncured breach.

We completed the evaluation program, however, following a strategic priority review in 2022, we decided not to continue active development of RT-109.

CCHN has not requested to negotiate for commercial rights for RT-109 in China.

There are no payment obligations under the CCHN Agreement.

Manufacturing and Quality Assurance

We currently manufacture and assemble RaniPill capsules at our facilities in San Jose and Milpitas, California.

We currently manufacture and assemble RaniPill capsules at our facility in San Jose, California.

We also inspect, package and ship finished products to support our clinical trials from this facility.

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Development of our product candidates includes identifying sources that can provide consistent quality and increasing quantities of APIs or drug substance to meet our needs through in vitro studies, preclinical studies, and clinical trials, and later into commercialization.

We currently do not have agreements in place for long-term supplies of any API or drug substance.

We currently do not have agreements in place for long-term supplies of any API or drug substance, other than ustekinumab biosimilar for RT-111.

Availability of API or drug substance supply may inform our decisions regarding which product candidates present the best development opportunities.

Currently we do not have any approved products.

We intend to either develop the commercialization sales and supply infrastructure as our product candidates are approved, or partner with pharma companies for commercialization.

We intend to either develop the commercialization sales and supply infrastructure as our product candidates are approved, or partner with pharmaceutical companies or distributors for commercialization.

Coverage and reimbursement of approved products by third-party payors

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Decisions regarding whether to cover a product, the extent of coverage, and the amount of reimbursement to be provided are made separately, and these decisions are made on a plan-by-plan basis because there is no uniform policy for coverage and reimbursement.

As a result, one payor’s decision to cover a

particular product does not ensure that other payors will also provide coverage for the product, or that any of the reimbursement rates will be adequate.

As a result, one payor’s decision to cover a particular product does not ensure that other payors will also provide coverage for the product, or that any of the reimbursement rates will be adequate.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage policy, formulary, and reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.

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Key competitive factors affecting the commercial success of product candidates we may develop are likely to be efficacy, safety and tolerability profile, reliability, convenience of administration, price, and reimbursement.

Broadly speaking, we will face competition from current and future (generic or biosimilar) manufacturers of the branded injectable versions of our pipeline drugs, manufacturers such as AbbVie Inc., Eli Lilly and Company, Novartis AG, Roche Holdings AG, etc.

However, we believe that oral biologics have the potential to take significant market share from current injectable therapies.

We also believe that oral biologics have the potential to expand existing markets by an early reach into new patient populations that are averse to taking injections.

We are aware of a few companies that are pursuing oral biologics through either device-based or chemistry-based technologies.

Early stage device-based technologies such as the SOMA and LUMI from the Novo Nordisk-MIT collaboration were reported to be in preclinical stages several years ago.

Chemistry-based oral delivery companies include Oramed Pharmaceuticals, Inc., Entera Bio Ltd., Applied Molecular Transport Inc., Protagonist Therapeutics, Inc., i2O, Therapeutics, Progenity, Inc., Intract Pharma, and two with recently approved oral peptide products –

Amryt Pharma ( Mycappssa ) and Novo Nordisk A/S ( Rybelsus ).

We are aware of certain other companies that are pursuing oral biologics through either device-based or chemistry-based technologies.

Early-stage device-based technologies such as the SOMA and LUMI from the Novo Nordisk-MIT collaboration were reported to be in preclinical stages.

Another company pursuing a device-based approach is Biograil ApS.

Chemistry-based oral

delivery companies include Oramed Pharmaceuticals, Inc., Entera Bio Ltd., Applied Molecular Transport Inc., Protagonist Therapeutics, Inc., i2O Therapeutics, Biora Therapeutics, Inc., Intract Pharma, and two with recently approved oral peptide products –

Mycappssa from Amryt Pharma Plc (which announced it is being acquired by Chiesi Farmaceutici SpA) and Rybelsus from Novo Nordisk A/S.

Chemistry-based approaches have limited applications because they work only for small peptides and, even then, with low (often less than 1%) bioavailability, far lower than injections.

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This patent family claims many device aspects of the RaniPill capsule, and the delivery of a wide variety of biologics using the RaniPill capsule.

Patents and patent applications in this core family number more than 230.

As of January 14, 2022, this patent family included 65 patents issued in the United States and 126 patents issued in other jurisdictions (in Australia, Austria, Belgium, Canada, China, Denmark, Finland, France, Germany, India, Ireland, Italy, Japan, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom), with applications pending in the United States, Australia, Canada, China, Europe, Hong Kong, India, and Japan.

Granted patents and pending patent applications in this core family number more than 260.

As of February 13, 2023, this patent family included 71 patents issued in the United States and 139 patents issued in other jurisdictions (in Australia, Austria, Belgium, Canada, China, Denmark, Finland, France, Germany, India, Ireland, Italy, Japan, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom), with applications pending in the United States, Australia, Canada, China, Europe, Hong Kong, India, and Japan.

Our microtablet patent family includes claims covering the microtablets delivered by the RaniPill capsule.

This patent family has a priority date in 2014, includes several dozen patents and patent applications, and is expected to have patent terms extending into at least 2035 if all fees are paid.

As of January 14, 2022, this patent family included 8 patents issued in the United States, 2 patents issued in Australia, and 1 patent issued in China, with applications pending in the United States, Australia, Canada, China, Europe, India, and Japan.

This patent family has a priority date in 2014, includes several dozen granted patents and pending patent applications, and is expected to have patent terms extending into at least 2035 if all fees are paid.

As February 13, 2023, this patent family included 11 patents issued in the United States, 6 patents issued in other jurisdictions (i.e., Australia, China and Japan), with applications pending in the United States, Australia, Canada, China, Europe, India, and Japan.

We own numerous additional patents and patent applications, with claims to additional biologics, pharmacologic properties of various biologics and various next generation devices, with applications pending in the United States, Australia, Brazil, Canada, China, Europe, Hong Kong, India, Japan, Mexico, and South Korea.

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Human studies in the United States require pre-approval by the FDA and an independent IRB, requested by way of an IDE or IND for investigational products such as our product candidates.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCP, which includes the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with current Good Clinical Practices (“cGCP”), which includes the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.

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Regulatory authorities, the IRB, or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk, the trial is not being performed in accordance with the investigational plan or associated protocols, or that the trial is unlikely to meet its stated objectives.

Some studies also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if the data safety monitoring board determines that there is an unacceptable safety risk for subjects, no demonstration of efficacy, or other grounds.

unacceptable safety risk for subjects, no demonstration of efficacy, or other grounds.

There are also requirements governing the reporting of ongoing preclinical studies, clinical trials, and clinical trial results to public registries.

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These studies are designed to determine the metabolism and pharmacologic actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

The total number of subjects and patients included in Phase 1 studies varies with the drug, but is generally in the range of 20 to 80.

The total number of subjects included in Phase 1 studies varies with the drug but is generally in the range of 20 to 80.

Phase 2 includes the controlled clinical studies conducted to evaluate the effectiveness of the drug for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term side effects and risks associated with the drug.

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Investigational products

Prior to initiating a clinical trial of an investigational product such as for one of our product candidates, the FDA must grant authorization to proceed.

Prior to initiating a clinical trial in the United States of an investigational product such as for one of our product candidates, the FDA must grant authorization to proceed.

A request for authorization is made by way of an IND or IDE application as applicable for the clinical trial.

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The application may include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive findings.

may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use and/or from a number of alternative sources, including studies initiated by investigators or cooperative clinical groups.

Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use and/or from a number of alternative sources, including studies initiated by investigators or cooperative clinical groups.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product to the satisfaction of FDA.

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PDUFA also imposes an annual program fee for each marketed human drug or biologic.

BsUFA imposes a user fee for a biosimilar development program at the time of the first meeting with the FDA or the initial IND submission, whichever occurs first.

Biosimilar User Fee Amendments impose a user fee for a biosimilar development program at the time of the first meeting with the FDA or the initial IND submission, whichever occurs first.

This fee must be paid annually.

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An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form.

Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form.

A Complete Response Letter usually describes specific deficiencies in the NDA or BLA identified by the FDA.

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For example, presently the FDA has a fast-track designation, a priority review path, an accelerated approval path, and a breakthrough therapy designation.

Any product submitted to the FDA for approval may be eligible for one or more of such FDA programs intended

to expedite development and review.

Any product submitted to the FDA for approval may be eligible for one or more of such FDA programs intended to expedite development and review.

These expedited approvals do not change the standards for approval but may expedite the development or approval process.

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The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

clinical trials to assess new safety risks, or imposition of distribution restrictions or other restrictions under a REMS program.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical trials to assess new safety risks, or imposition of distribution restrictions or other restrictions under a risk evaluation and mitigation strategy (“REMS”) program.

Other potential consequences include, among other things:

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Mandated modification of promotional materials and labeling and the issuance of corrective information;

The issuance of safety alerts, Dear Healthcare Provider letters, press releases, and other communications containing warnings or other safety information about the product

The issuance of safety alerts, Dear Healthcare Provider letters, press releases, and other communications containing warnings or other safety information about the product, and

Injunctions or the imposition of civil or criminal penalties.

The FDA closely regulates the marketing, labeling, advertising, and promotion of biologics.

A company can make only those claims relating to safety, efficacy, purity, and potency that are approved by the FDA and in accordance with the provisions of the approved label.

A company can make only those claims relating to safety, efficacy, purity, and potency that are approved by the FDA and in accordance with the provisions of

the approved label.

However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling.

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The applicant provides patent information to the FDA as part of its NDA, or after patent grant.

Orange Book patent listing provides a 30 month stay of FDA approval of any generic submitted via an ANDA.

Orange Book patent listing provides a 30 month stay of FDA approval of any generic submitted via an abbreviated new drug application (“ANDA”).

An applicant submitting an ANDA must, for each patent listed against the approved drug in the Orange Book, either (i) state that the ANDA applicant is not seeking approval for a patented method of use, (ii) ask the FDA to delay approval until that patent is expired (a “Paragraph III”

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Some of our product candidates may be eligible for exclusivities provided under various FDA programs.

Exclusivity refers to certain delays and prohibitions on approval of competitor drugs available under an applicable statute that take effect upon

FDA’s approval of a biologics or drug, or of certain supplements to the BLA or NDA.

Exclusivity refers to certain delays and prohibitions on approval of competitor drugs available under an applicable statute that take effect upon FDA’s approval of a biologic or drug, or of certain supplements to the BLA or NDA.

Exclusivities do not convey any advantage in or shorten the duration of the regulatory review and approval process.

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For example, the federal False Claims Act prohibits any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.

federal Physician Payments Sunshine Act requires applicable manufacturers of prescription drugs, devices, biological products, or medical supplies subject to FDA approval or clearance for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to annually report to the Centers for Medicare & Medicaid Services (“CMS”) information related to certain payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, including ownership and investment interests held by physicians and their immediate family members.

federal Physician Payments Sunshine Act requires applicable manufacturers of prescription drugs, devices, biological products, or medical supplies subject to FDA approval or clearance for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to annually report to the Centers for Medicare & Medicaid Services (“CMS”) information related to certain payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

HIPAA created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private third-party payors, and making false statements relating to healthcare matters.

In addition, HIPAA, as amended the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, impose certain requirements on HIPAA covered entities, which include certain healthcare providers,

healthcare clearinghouses, and health plans, and individuals and entities, known as business associates, that provide services for or on behalf of the covered entities that involve individually identifiable health information as well as their covered subcontractors, relating to the privacy, security, and transmission of individually identifiable health information.

In addition, HIPAA, as amended the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their implementing regulations, impose certain requirements on HIPAA covered entities, which include certain healthcare providers, healthcare clearinghouses, and health plans, and individuals and entities, known as business associates, and their covered subcontractors that provide services for or on behalf of the covered entities that involve individually identifiable health information as well as their covered subcontractors, relating to the privacy, security, and transmission of individually identifiable health information.

We are also subject to additional similar U.S.

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In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative initiatives, including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control of drug pricing.

For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), which was enacted in March 2010, contains a number of provisions of particular import to the pharmaceutical and biotechnology industries, including, but not limited to, those governing enrollment in federal healthcare programs, a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated, and annual fees based on pharmaceutical companies’

For example, the Patient Protection and Affordable Care Act, as amended by the Health Care

and Education Reconciliation Act (collectively, the “ACA”), which was enacted in March 2010, contains a number of provisions of particular import to the pharmaceutical and biotechnology industries, including, but not limited to, those governing enrollment in federal healthcare programs, a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated, and annual fees based on pharmaceutical companies’

share of sales to federal health care programs.

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was repealed by Congress.

Thus, the ACA will remain in effect in its current form.

Moreover, prior to the U.S.

Supreme Court ruling, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period coverage through the Affordable Care Act marketplace, and instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare.

Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.

The IRA also eliminates the “donut hole”

under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.

It is possible that the ACA will be subject to additional challenges in the future.

It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA, or the impact any changes to the ACA may have on our ability to commercialize products or the prices we are able to obtain.

Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers.

These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, including the Infrastructure Investment and Jobs Act, will remain in effect through 2031 unless additional action is taken by Congress.

COVID-19 relief legislation suspended the 2% Medicare sequester from May 1, 2020 through March 31, 2022.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, including the Infrastructure Investment and Jobs Act, will remain in effect through 2031 unless additional action is taken by Congress.

Under current legislation the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.

Further, Congress is considering additional health reform measures.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Presidential executive orders, Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,”

In addition, recently there has been heightened governmental scrutiny over the manner in which drug manufacturers set prices for their commercial products.

At the federal level, the former Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,”

with multiple provisions aimed at prescription drugs.

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Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

In addition, the IRA, among other things, (i) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

Further, the Biden administration released an additional executive order on October 14, 2022, directing HHS to submit a report on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models for lowering drug costs for Medicare and Medicaid beneficiaries.

It is unclear whether this executive order or similar policy initiatives will be implemented in the future.

Individual states in the United States have also become increasingly aggressive in passing legislation and implementing regulations designed to control drug pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates, if approved.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

Data privacy and security obligations

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Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (“CCPA”), the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”) and the EU GDPR as it forms part of United Kingdom law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (“UK GDPR”).

In addition, several states within the United States have enacted or proposed data privacy and security laws.

addition, several states within the United States have enacted or proposed data privacy and security laws.

For example, Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act.

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Although the CCPA exempts certain data processed in the context of clinical trials, the CCPA, to the extent applicable to our business and operations, may increase our compliance costs and potential liability with respect to the personal data we maintain about California residents.

In addition, the California Privacy Rights Act of 2020, or CPRA, effective January 1, 2023, will expand the CCPA.

In addition, the California Privacy Rights Act of 2020 (“CPRA”), effective January 1, 2023, will expand the CCPA.

The CPRA will, among other things, give California residents the ability to limit the use of certain sensitive personal data, establish restrictions on personal data retention, expand the types of data breaches that are subject to the CCPA’s private right of action, and establish a new California Privacy Protection Agency to implement and enforce the new law.

federal and state consumer protection laws require us to publish statements that accurately and fairly describe how we handle personal data and choices individuals may have about the way we handle their personal data.

Employees and Human Capital Resources

As of December 31, 2022, we had 163 full-time employees and no part-time employees.

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None of our employees are represented by a labor union or are a party to a collective bargaining agreement and we believe that we have good relations with our employees.

Attracting and Retaining Talent

Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees.

The principal purposes of our equity incentive plans are to attract, retain, and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards.

In addition, we have added a People Ops team that has launched multiple initiatives focused on employee health and engagement, inter and intra team building and

collaboration, and individual career development planning.

We have implemented a health engagement program that is completed by all new hires.

We have also implemented a health engagement check-in for all existing employees.

This is all in support and encouragement of a more collaborative environment at the company, which is vital to our efforts to recruit, retain and develop our employees.

Compensation and Benefits

The success of our business is fundamentally connected to the well-being of our employees.

We provide market competitive compensation and benefits programs.

In addition to salaries, these programs include potential annual discretionary bonuses, broad-based equity awards, a 401(k) plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave and flexible work schedules, among others.

These benefits provide our employees choices where possible so they can customize their benefits to meet their needs and the needs of their families.

COVID-19 and Employee Safety

In response to the COVID-19 pandemic and the related guidelines and orders issued by federal, state and local governments, we continue to restrict access to our offices in California, limit work gatherings, and suspend non-essential business travel.

Many of our employees are conducting their work remotely, wholly or in part, to reduce the risk of a COVID-19 outbreak in our facilities.

We have modified workspaces for employees that are essential to continue to work in the office.

The safety, health, and well-being of our employees is paramount.

As such, we will consider ongoing government regulations and local health conditions in establishing and implementing workplace practices.

Initial Public Offering

We became publicly traded in July 2021 through the IPO in which the Company sold 7,666,667 shares of its Class A common stock, including shares issued pursuant to the exercise in full of the underwriters’

option, for cash consideration of $11.00 per share.

We received approximately $73.6 million in net proceeds, after deducting underwriting discounts, offering costs and commissions.

We used the proceeds from the IPO to purchase 7,666,667 newly issued economic nonvoting Class A units of Rani LLC.

Details regarding the IPO can be found in “

Notes to the Consolidated Financial Statements ”

Capital Structure

We have three classes of common stock.

Our Class A common stock has one vote per share, our Class B common stock has 10 votes per share, and our Class C common stock has no voting rights, except as otherwise required by law.

All shares of our Class B common stock are held by certain stockholders who held equity in Rani LLC before the IPO.

The shares beneficially owned by the Continuing LLC Owners represent more than 80% of the total voting power of our outstanding capital stock as of March 15, 2022.

The Continuing LLC Owners will be able to determine or significantly influence any action requiring the approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction.

Shares of our Class C common stock are not issued nor outstanding and we have no current plans to issue shares of Class C common stock.

These shares will be available to be used in the future to further strategic initiatives, such as financings or acquisitions, or issue future equity awards to our service providers.

Because the shares of Class C common stock have no voting rights (except as otherwise required by law), the issuance of such shares will not result in further dilution to the voting power held by the Continuing LLC Owners.

The multi-class structure of our common stock is intended to ensure that, for the foreseeable future, the Continuing LLC Owners continue to control or significantly influence our governance which we believe will permit us to continue to prioritize our long-term goals rather than short-term results, to enhance the likelihood of stability in the composition of our board of directors and its policies, and to discourage certain types of transactions that may involve an actual or threatened acquisition of us.

Organizational Transactions

As the sole managing member of Rani LLC, Rani Holdings operates and controls all of Rani LLC’s operations, and through Rani LLC, conducts all of Rani LLC’s business.

In connection with the IPO, we were party to the following organizational transactions (the “Organizational Transactions”):

Amended and restated our certificate of incorporation to provide for the issuance of (i) Class A common stock, each share of which entitles its holders to one vote per share, (ii) Class B common stock, each share of which entitles its holders to ten votes per share on all matters presented to the Company's stockholders, (iii) Class C common stock, which has no voting rights, except as otherwise required by law and (iv) preferred stock.

Certain holders of Class A Units tendered their Class A Units for shares of our Class A common stock.

Certain holders of Class A Units continued to hold such Class A Units (“Continuing LLC Owners”) and received shares of our Class B common stock.

Entered into a registration rights agreement and tax receivable agreement (“Tax Receivable Agreement”

or “TRA”) with certain of the Continuing LLC Owners.

Corporate Information

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What changed 10-K

Item 1. Business