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SAN JOSE, Calif. - Rani Therapeutics Holdings, Inc. (NASDAQ:RANI), a company specializing in the oral delivery of biologics, has announced a registered direct offering that is set to close on October 16, 2024. The deal will raise approximately $10 million in gross proceeds before fees and expenses, with the potential for additional funds depending on warrant exercises.
The offering involves the sale of 3 million shares of Class A common stock and pre-funded warrants for 333,333 shares, with each share or warrant bundled with a Series C common warrant to purchase one share at $3.00. The Series C warrants are exercisable over five years from the date of issue.
In a strategic move, Rani Therapeutics has also agreed with the investor to cancel all outstanding Series A common warrants, which were initially issued on July 22, 2024. As a result of this agreement, these warrants will no longer be exercisable.
Maxim Group LLC is serving as the sole placement agent for the offering, which is being made under a shelf registration statement that became effective on August 10, 2022. The securities are being sold by means of a prospectus supplement and the accompanying prospectus, which will be filed with the SEC.
The capital raised is expected to support Rani Therapeutics' continued development of its proprietary RaniPill® capsule technology, designed to administer biologics orally rather than through injections or infusions. The company has completed several preclinical and clinical studies to evaluate the safety, tolerability, and bioavailability of the RaniPill®.
This press release does not constitute an offer to sell or a solicitation of an offer to buy securities, and there will be no sale of the securities in any jurisdiction where such an offer, solicitation, or sale would be unlawful. The offering's details are based on a press release statement from Rani Therapeutics.
In other recent news, Rani Therapeutics Holdings, Inc. has been undergoing significant developments. The company reported a Q2 net loss of $0.51 per share, in line with expectations. Following this, H.C. Wainwright adjusted its 12-month price target for the company from $13 to $9, while maintaining a Buy rating. Furthermore, the company secured approximately $10 million from a stock sale, involving the sale of 2.8 million shares of Class A common stock and pre-funded warrants for an additional 446,753 shares.
Rani Therapeutics also announced a collaboration with South Korean biotech firm, ProGen Co., Ltd., to co-develop and commercialize RT-114, an oral therapeutic for obesity. The partnership will leverage Rani's RaniPill® capsule and ProGen's proprietary protein, PG-102, with both companies agreeing on a 50/50 cost and revenue share arrangement for global development and commercialization.
In addition, Rani Therapeutics appointed Marcum LLP as its new independent registered public accounting firm, replacing Ernst & Young LLP. No disagreements were reported on matters of accounting principles, practices, financial statement disclosure, or auditing procedures during the fiscal years and interim period leading up to the change. Stifel and Canaccord Genuity maintained their Buy ratings on the company, despite adjustments in their price targets.
InvestingPro Insights
Rani Therapeutics' recent registered direct offering comes at a critical time for the company, as reflected in the latest InvestingPro data. The company's market capitalization stands at $169.83 million, indicating its current valuation in the biotech sector. This capital raise is particularly significant given that Rani is "quickly burning through cash," according to an InvestingPro Tip. The additional $10 million in gross proceeds from this offering could provide much-needed financial runway for the company's ongoing development of the RaniPill® capsule technology.
Despite the cash burn, Rani has shown impressive market performance recently. InvestingPro data reveals a striking 45.21% price return over the past week and a 34.18% return over the last month. This positive momentum might have contributed to the company's ability to secure this financing deal. However, it's worth noting that Rani "operates with a moderate level of debt," as per another InvestingPro Tip, which underscores the importance of this capital infusion for maintaining financial stability.
The company's focus on developing oral biologics aligns with its high Price / Book multiple of 59.91, suggesting investors are pricing in significant future growth potential. However, potential investors should be aware that Rani is "not profitable over the last twelve months," with an adjusted operating income of -$57.85 million for the same period.
For those interested in a deeper analysis, InvestingPro offers 7 additional tips for Rani Therapeutics, providing a more comprehensive view of the company's financial health and market position.
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