Updated: Dec 13, 2021
Optifinancial Newsletter - Knowledge is power - Brad Mitchell
This is not financial advice nor recommendations. This is purely our own thoughts and opinions regarding the matter discussed below for entertainment purposes. This is not advice and is never intended to be.
Disclosure: We own PROG securities/shares at the time of publication. This could affect my biases in my analysis.
Progenity | $2.46
$.402 Billion Valuation
Rani | $19.50
$.955 Billion Valuation
What does Rani Therapeutics do?
Terry Research Lab helped to clarify timelines
Who is ahead to get their product on the market first?
Before going further, I have written on the competition that Progenity is currently up against in the Oral Drug Delivery sector. I cover Rani in general details on their technology. Read here
I also highly recommend you look through Rani’s recent corporate presentation from September, (My opinion is Progenity is much ahead of them in terms of moat of potential revenue and probability of success with Product, however it is also great to see other company's progress and to help compare)
What does Rani Therapeutics do in the Oral Drug Delivery market?
Rani injects a solid pellet, with a reformulated drug into the intestines.
This happens by an enteric coating dissolving at a specific PH level and then the pill activates. I have written about their methods in my previous article over competition.
This photo above shows their solid pellet with a reformulated drug. This reformulation will take more much testing and time to get approved by the FDA. This is a key difference between Progenity’s technology. Progenity leverages the existing formulation and can take it directly from the market, perform a 2 phase trial and then optimize dosing. Afterwards Progenity will get the approval from the FDA for the medical devices application with the drug.
Rani on the other hand has to go through a multi-step process which will need P1, P2 & P3 drug trial results before being approved (Shown above) Since they are using their novel application with a solid drug into the intestines, they need to have strong data regarding how it dissolves and affects patients.
From Rani's published timelines, it shows that they will be able to get their pill on the market for Octreocide by 2027-28 (if all of the testing and clinical data goes well). Rani must go through the FDA drug approval process, while Progenity just needs the medical device approval. Progenity will most likely have their DDS pill on the commercial market by 2025 (Treating Ulcerative Colitis).
Those 2 types of approval processes are extreme differences because Rani will have to expend much more time and money to get a potential drug through, while Progenity can quickly integrate already on the market drugs through two PkPd study iterations and if they show results similar or better to current standard of care (SC) then they can go to market at a much rapid pace and with less risk. There will be less liability associated with Progenity's capsules due to the mechanical design and due to the already known nature of the drug profiles.
Terry Research Lab Clarification on timelines
Here is a tweet from a distinguished group of researchers who responded to my tweet regarding RANI and their recent publication of oral delivery technology. They responded in a very well put together succinct message which helped me understand that the timelines for Rani are extended vs the recent Terry Research Lab digestible tech publication & Progenity's OBDS/DDS tech. They published the SCIDD pill which deserves it's own article. Here is a link to the Terry Research Lab website. Because Progenity does not reformulate drugs,this helps describe the speed to market Progenity's OBDS & DDS tech as well. No need for a Phase 3 efficacy. Thank you Terry Research Labs for your journal publication. Progenity did help fund this research as well. Link to their journal publication here.
Recently, Rani has completed a phase 1 clinical study of Octreotide and demonstrated bioavailability of 40-78%.
Conversely Progenity has lacked in this area showing 15% with their Needle-less pill (OBDS).
They have upgraded their pill since the last time in late 2020-early 2021. And I am expecting Progenity to reproduce 30-50% bioavailability in 2022. As-like technology to Progenity’s OBDS such as Jet CAP has shown 30-50% bioavailability and they use a mechanical spring, Progenity’s device uses pressurized gas and it can be made to come out at a higher pressure by tuning it a bit. This higher pressure should yield higher bioavailability which will be on par with Rani’s technology.
The Progenity OBDS could likely be commercialized in 2025 for Liraglutide. I estimated it to be in 2026-2028. This means they are more ahead than I expected. Check this out below! Brought to me by twitter user @UKnokke
Rani also has quite a few Pk (not PkPd) datas regarding different drugs from animal studies. You can see much more from their corporate presentation here
Rani therapeutics is the perceived market leader and has shown an increase in their cashburn to possibly try to make progress quicker. In their last financial report, they showed an increase from only 2.5 million a quarter to 12 million. This snippet below is showing Rani's financial status as of November 15th.
I believe that they are seeing how they are needing to progress faster as Progenity is blazing a path to commercialization. Rani is spending more money as they must keep pace. They also have quite a few drugs in progression.
Whose products will go on the market first / Final thoughts on the company's
By looking at the 2 company timelines and the types of approval processes they need to go through. It is most likely Progenity will get their products on the market 2 years before Rani.
Also, my final thoughts for the two companies is I see that Progenity is creating relationships and has already had 2 large bio pharmas decide to partner with them as will as a Ionis Pharmaceuticals with their antisense technology.
There is more large biopharma interest towards Progenity than Rani. This points to Progenity doing better in the future as they are being connected and establishing strong relations with other companies. I see this being very fruitful and strategic for Progenity. Rani has not established any large partnerships as of yet.
My question is at this time of writing, why is Progenity half as valuable in the market as Rani.
My guess is that the market will reevaluate Progenity after they release their PkPd data which I wrote on last week here
Current Price: $2.46
3 Month Price Forecast: $10-17
If the PK/PD topline data comes out for the DDS this December and shows much more efficacy than current efficacy of Humira by injection or IV, then the company will be reevaluated as it is now seriously an impact and catalyst for change in the healthcare industry. If the data is good, they will show the power of oral drug delivery. Remember RANI is shown to be the leader at the moment with their pill that injects into the intestines. I do not believe their technology has the right ingredients for serious market uptake. Too many stumbling blocks and patients have to take the pill in a fasted state. For Progenity, they will be exploring non-fasted states in the 1st Quarter of 2022 using the DDS. If they show functionality through both states, the share price could surpass my current forecasts as now the pill will be seen as the best for patient and physician experience. Also, remember as they collect data from one pill, they can leverage that for the others.
10-12 Year Price Forecast (2030-2032):
Bear case: $400 a share or $66 billion in valuation
If Progenity takes a bit longer on their goals and commercializes in 2028, I believe they will still be driving 3-4 billion a year and could be trading at a PE of 20.
Bull case: $1,200 a share or $198 billion in valuation.
If Progenity can start commercialization in 2025 and progress their technology through multiple revenue streams, we could see solid dominance and incredible growth. I think they could capitalize on Humira and then further large molecules (tofacitinib & GLP-1). If their Ionis partnership pushes through as well (60 billion market by 2030), we could see 9-12 billion a year. And with a PE of 20.
Final thought on PROG: After diving into their board members and management. Progenity is strategic. Their technology has been in development before 2010 and now has reached the time where it will start picking up pace and fast. These four horses will guide Progenity and disrupt healthcare. Before you know it, the company may be a large biopharma if they can stave off the buyout offers along the way. One thing I think Progenity need s to do is to guide investors on their timeline. They haven't stated when they will commercialize this pill, but looking to hearing more as the DDS December data is released. These are my own analysis and opinions based on industry knowledge and following other products in their development.
Disclosure: We own PROG securities/shares at the time of publication.
All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.
Thanks for subscribing to our newsletter. If you find this information helps you, please share it with someone else! It will help us out greatly.
Until next week,
and the Optifinancial Team
Optifinancial is not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA ;nor an accountant nor a lawyer. Optifinancial is not a finance professional through formal education. Optifinancial believes in and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment of money. The contents on this site/letter/email are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. Optifinancial can’t promise that the information shared on our posts is appropriate for you or anyone else. By using our content, you agree to hold Optfinancial or any constituents related to Optifinancial harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided through our site, website, social media and newsletter.
Optifinancial does not collect information about you other than (1) what you personally provide if you submit a comment (your email will not be published) or sign up for our newsletter updates and (2) what’s available through normal server logs and Google Analytics. Optifinancial won’t sell or disclose your information to others unless we have received prior written agreement from you (e.g., you agreed to let me share your comment on a post with other readers).
17350 State Highway 249
Ste 220 #3942
Houston, Texas 77064