By John Vandermosten, CFA
NASDAQ:RANI
READ THE FULL RANI RESEARCH REPORT
With investors perched on the edge of their seats for months, Rani Therapeutics Holdings, Inc. (NASDAQ:RANI) announces a deal including upfront milestones and partner-funded asset development. On October 18th Rani and Chugai Pharmaceutical disclosed a collaboration and license agreement that includes a $10 million upfront payment, the potential for $75 million in technology transfer and development milestones, $100 million in sales milestones and single digit royalties on product sales. The event was preceded by a research agreement signed between the two in August 2024. Rani concurrently announced a $60 million financing with several new and existing investors. The capital will be used to advance its pipeline and in particular its lead asset RT-114. We see the deal with Chugai as a vote of confidence for the Rani Pill (RP) and potentially a sign of future deals. Management has been in advanced discussions with several other suitors this year while simultaneously negotiating limited exclusivity in existing relationships generating a profile that is attractive to both partners and acquirors.
Collaboration with Chugai Pharmaceuticals
Rani announced its collaboration with Chugai in an October 17th press release[1] and Form 8-K filing. The deal provides Rani with a $10 million upfront payment and the potential for $57 million in technology transfer, $18 million in development and $100 million in sales milestones along with a single digit royalty on sales. The primary biologic to be combined with RP HC will treat hemophilia A and will be the successor to Hemlibra.[2] While similar in structure to Hemlibra, the molecule in question will be a new biologic entity and have all of the associated costs and benefits related to that status with respect to clinical trial requirements and patent protection. The new product is expected to allow for longer dosing intervals and, of course, oral administration, improving patient convenience. The two parties will share development responsibilities for the product allocating preclinical, CMC, manufacturing and supply responsibilities between each other. Chugai will be solely responsible for clinical, regulatory and commercial efforts and its drug. Rani will focus on the device.
The agreement grants Chugai an exclusive, worldwide right and license to RP HC intellectual property to research, develop, manufacture, commercialize and market the drug-device combination. Rani has the right to manufacture and supply the device and will receive payment from Chugai to do so. Chugai retains the right to replace the identified compound with another, a time-limited right of first refusal for a select group of additional targets and an option to extend its rights to five additional drug targets.
Last Year’s Research Agreement with Chugai
A May 19th, 2025 press release informed investors that Rani had signed a research agreement with Chugai Pharmaceutical Co. on August 13th, 2024. The agreement granted Chugai rights to develop two molecules with undisclosed targets. Since the signing, the partner has demonstrated bioavailability comparable with delivery via the subcutaneous route for both molecules. The partners have now evaluated feasibility of applying Rani’s technology to these antibodies generating the agreement announced above.
Chugai Pharmaceutical is a research and development-oriented pharmaceutical company based in Tokyo, Japan established in 1925. It operates as a subsidiary of Hoffmann-La Roche which owns a 62% stake and trades on multiple exchanges including the OTC under the ticker CHGCY. Chugai has developed and marketed several globally recognized pharmaceuticals, often in partnership with Roche. This includes Hemlibra, Actemra, and Alecensa among other products. Chugai also discovered orforglipron and licensed it to Eli Lilly in 2018.
Concurrent Financings
Concurrent with the Chugai collaboration announcement, Rani priced a $60.3 million private placement of 42,633,337 Class A common shares and 82,366,667 pre-funded warrants to close on October 21st, 2025. Each Class A share or pre-funded warrant has a warrant attached with an exercise price of $0.48 with a five-year life. H.C. Wainwright and Maxim Group acted as placement agents. Gross proceeds are estimated to be $60.3 million, prior to deducting related fees and expenses. We estimate that net proceeds will be approximately $56 million after expenses are recognized.
Investors in the deal include Samsara BioCapital, RA Capital Management, Anomaly, Special Situation Funds, Invus and founder Mir Imran. Each of these investors has a specialty in life sciences investing with longer term investment horizons compared to the average generalist capital provider. After the financing closes, Samsara and Anomaly may each designate one member to Rani’s board. The number of board members will not change. Samsara and Anomaly will maintain their right to a board seat as long as they continue to own 25% of the securities issued to them as part of the capital raise.
In 2022, Rani entered into a loan agreement with Avenue Venture Opportunities Fund and as of June 30th, 2025 carried long term debt of $17.2 million on its balance sheet. Along with the equity capital raise, Rani converted $6 million of this obligation for 12.5 million shares of Class A Rani stock. This is equivalent to $0.48 per share. Each share includes an attached warrant with an exercise price of $0.48.
Milestones
- Research agreement with Chugai Pharmaceutical – August 2024
- Launch of Phase I trial for RT-114 – 4Q:25
- End of NASDAQ minimum market value requirement resolution period – October 2025
- Collaboration with Chugai Pharmaceutical – October 2025
- $60 million capital raise and debt conversion – October 2025
- End of NASDAQ $1.00 minimum bid price resolution period – December 2025
- PG-102 Phase II readout from ProGen – 1H:26
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[1] See link here for Chugai press release.
[2] Hemlibra is expected to generate $5.7 billion in revenues in 2025 with sales by Roche and Chugai based on analyst data compiled by Evaluate Inc. It is a subcutaneous injection dosed at varying intervals from once per week to once per month. It is a prescription medicine used to prevent or reduce bleeding episodes in adults and children with hemophilia A. It is an antibody that mimics the function of coagulation factor VIII, allowing blood to clot properly. The drug is administered via subcutaneous injection, typically once a week, every other week, or once a month.