RLMD - NASDAQ

Good afternoon, ladies and gentlemen, and welcome to the Relmada Therapeutics Inc. Fourth Quarter and Full Year 2023 Results Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Tuesday, March 19, 2024. I would now like to turn the conference over to Mr. Tim McCarthy. Thank you. Please go ahead.

Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer, Sergio Traversa and Chief Financial Officer, Maged Shenouda. This afternoon, Relmada issued a press release, providing a business update, announcing financial results, for the three and 12 months ended December 31, 2023. Please note that certain information discussed on the call today, is covered under the Safe Harbor provisions, of the Private Securities Litigation Reform Act. We caution listeners that during this call, Relmada's management team will be making forward-looking statements. Actual results could differ materially, from those stated, or implied by these forward-looking statements, due to risks and uncertainties associated with the company's business. These forward-looking statements, are qualified by the cautionary statements, contained in Relmada's press release, issued today and the company's SEC filings, including in the annual report on Form 10-K, for the year ended December 31, 2023, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date, of this live broadcast, March 19, 2024. Relmada undertakes no obligation, to revise, or update any forward-looking statements, to reflect events, or circumstances after the date, of this conference call. Now, I'd like to turn the call over to Sergio. Sergio?

Thank you, Tim, as always. Good afternoon to everyone, and welcome to the Relmada fourth quarter, and full year 2023 conference call. We are continuing, to make solid progress in advancing the ongoing Phase 3 program, for REL-1017 in major depressive disorder, MDD, as well as in the promising preclinical novel psilocybin program, all of which I will briefly cover today. Following this, Maged will review, our fourth quarter and full year 2023, financial results, and then we will take your questions. Let's begin with an update on the Phase 3 program for REL-1017. As you know, Relmada is focused on developing REL-1017, as an adjunctive treatment for MDD. As previously communicated, we have made critical changes to RELIANCE II, the ongoing study 302, a Phase 3 two-arm placebo-controlled pivotal study, evaluating REL-1017 25 milligrams, for adjunctive MDD, aimed at controlling placebo response, and improving the enrollment quality. The amendment Study 302 protocol, has been implemented, across all our clinical sites. Enrollment continues to steadily progress, and our ability, to leverage our close relationship, with the study site, is paying dividends. Moreover, the ongoing initiative we put in place, to drive trial awareness with prospective patients, are also bearing fruit. Importantly, we are evaluating the productivity of sites on a real-time basis and making changes where needed. As a reminder, we plan to enroll approximately 300 patients into RELIANCE II. Based on our current projection, we expect the enrollment into RELIANCE II, to be completed in mid-2024. In our second Phase 3 trial for REL-1017, named RELIGHT, or Study 304, we began those in patients during the third quarter of last year. RELIGHT also has a planned enrollment, of approximately 300 patients that is planned, to be completed by year-end 2024. To reiterate what we have said previously, like RELIANCE II, RELIGHT is a randomized, double-blind, placebo-controlled four-week trial, evaluating the efficacy and safety of REL-1017, as an adjunctive treatment for MDD, in patients experiencing, inadequate response, to ongoing background antidepressant treatment. The primary endpoint of both studies is the same, is the change in the MADRS total score from baseline, to day 28, as compared to placebo. I should highlight that, we made significant changes to our screening and enrollment processes, in order to ensure that we have patients that, meet all the quality criteria. More specifically, we have instituted a comprehensive adjudication process through, which we now require medical records, for all patients enrolled in RELIANCE II and RELIGHT. Given this, our screen failure rate in these studies, is now approximately 80% versus 50% previously in RELIANCE I and RELIANCE III, our previously completed Phase 3 trials for REL-1017. We strongly believe that these changes, will significantly enhance the probability, of success of our current studies. Of note, we have completed all the necessary preclinical, manufacturing, and Phase 1 studies, required for a potential REL-1017 NDA filing, and are now focused on execution of various pre-commercial readiness activities. Moving now, to our promising preclinical novel modified release psilocybin program. You may recall that, at last November AASLD meeting, the Liver Conference, compelling preclinical data, were presented in a poster presentation. These data, demonstrated the beneficial effect, of low - chronic dose psilocybin on multiple metabolic parameters in a rodent model, of metabolic dysfunction, associated steatotic liver disease, or MASLD. These initial promising preclinical results, support the therapeutic potential, of low chronic dose of psilocybin. As we said previously, based on - these data, low dose psilocybin could improve lipids and glucose, with potential fewer side effects, over other investigative treatment approaches such as GLP-1, glucagon, and GIP. We intend to initiate a single ascending dose, Phase 1 trial in obese patients in the first half of 2024, to define the pharmacokinetic, safety and tolerability profile, for our modified release psilocybin formulation in this population. This will be followed, by a Phase 2a trial, to establish clinical proof-of-concept. Data from the Plan 2a study, is anticipated in the first half of next year. Just to summarize a multiple upcoming key milestones over the next 12 to 18 months, we anticipate completing enrollment in the ongoing RELIANCE II study mid-2024, with top line in the second half. In addition, we plan to complete enrollment in the RELIGHT study, by the end of this year. Finally, we intend to initiate a Phase 1 clinical trial for the modified release formulation of psilocybin in the first half of this year. Moving on, while Maged, will provide a detailed review of our financial, I would like to emphasize that with current cash on hand, to take us into 2025, Relmada remains sufficiently funded, to fully execute our plans, to reach data readouts from both REL-1017 Phase 3 trials, RELIANCE II and RELIGHT, as well as conduct the planned Phase 1, for our modified release psilocybin formulation. I will now turn the call over to Maged, to review our fourth quarter and full year financial results. Maged?

Thank you, Sergio. Today we issued a press release announcing, our business and financial results, for the three and 12 months ended December 31, 2023, which I will now review. For the fourth quarter ended December 31, 2023, total research and development expense was approximately $14.8 million, as compared to $26.9 million, for the comparable period of 2022, a decrease of approximately $12.1 million. The decrease was primarily associated with the completion of two Phase 3 trials, and the long-term open label safety trial, Study 310. The research and development non-cash charge, related to stock-based compensation, totaled $1.8 million in most recently, completed fourth quarter. Total general and administrative expense for the fourth quarter, ended December 31, 2023, was approximately $12.1 million, as compared to $11.8 million, for the comparable period of 2022, an increase of approximately $243,000. The increase was primarily driven, by an increase in compensation expense, due to higher employee-related costs. The general and administrative non-cash charge related to stock-based compensation totaled $8.1 million in the most recently completed fourth quarter. For the fourth quarter ended December 31, 2023, the net loss was $25.2 million, or $0.84, per basic and diluted share, compared with a net loss of $37.9 million, or $1.28 per basic, and diluted share in the comparable period, of 2022. Turning to the results, for the full year ended December 31, 2023. Total research and development expense, was approximately $54.8 million, as compared to $113.3 million, for the year ended December 31, 2022, representing a decrease of $58.5 million. Again, the decrease, was primarily driven by a reduction in study costs, associated with the completion of two Phase 3 trials and the long-term open labels safety trial Study 310. For the year ended December 31, 2023, total general and administrative expense, was approximately $48.9 million, as compared to $47.9 million, for the year ended December 31, 2022. Again, increase was primarily driven, by an increase in compensation expense, due to higher employee related costs. For the year ended December 31, 2023, the net loss was approximately $98.8 million, or $3.28, per basic and diluted share, compared with a net loss of $157 million, or $5.30, per basic and diluted share, for the year ended December 31, 2022. As of December 31, 2023, we had cash, cash equivalents and short-term investments of approximately $96.3 million, compared to approximately $148.3 million, as of December 31, 2022. Cash used in operations for full year 2023, was $51.7 million. Based on our current clinical development plan, our current cash position provides us, with ample runway into 2025. Of note, this time period includes data readouts, from both Phase 3 trials, RELIANCE II, Study 302 and RELIGHT Study 304, as well as the initiation of our planned Phase 1 trial of our modified release psilocybin formulation. I will now ask the operator to please open the call for questions. Operator?

Thank you. [Operator Instructions] Your first question comes from the line of Marc Goodman from Leerink Partners. Please go ahead.

Hi, good afternoon. This is Basma on for Marc. For RELIANCE II, could you please remind us again, how many patients were enrolled, before the protocol amendments? And do you expect that, due to the inclusion of these patients prior to the amendments, that there will be any source of, I would say, noise - or, to the trial? Or were you able, to go back and check the inclusion criteria? Thank you.

Yes. Thank you. Sergio here. That's a great question. Previously to the amendment, we enrolled about 80, 90 patients. And so the, as of now, I mean - they will be included in the final analysis. And the, like, we have noticed, if I can expand for a bit, we have noticed that, there was a big difference in patient enrolled, when the COVID restriction were in place. And after the COVID restriction were lifted, so of these 80, 90 patients, about half were enrolled, after the COVID restriction were lifted. So, I mean, the data are blinded, so we don't really know, how the data will look like. But like, we don't have any reason to believe that, right, the, this patient would carry any particular baggage. Also, because the sites that, where the issue with data, was generated in the previous trials. They have never been phrased in RELIANCE II. So, the bottom line is that, yes, this patient will be included in the final analysis, but we don't have any particular reason, to believe that would carry, any particular burden on the final review. And we do have, on the call, Dr. Andrew Cutler, that is our Special Advisor for Clinical Development. And maybe, Andrew, if you are online, you may want to expand a little bit on the question, that is, right, will these patients enrolled previous to the protocol amendment, carry any weight on the final results?

Well, thank you very much. I'm here. Excuse me. I think it's a very reasonable question, but I'm pretty confident, I would say I'm very confident that we should be successful. The previous study, really was very close to being positive. It just missed. And so, you don't have to be perfect here. We just have to be better. I think the changes that have been made, particularly, with respect to analyzing the quality of the sites. And the protocol amendment, will make the quality - of the second cohort here, which is going to be the majority of the patients, I think will carry through. So, I'm very confident that despite having some patients enrolled previously, I still think, we're going to be successful overall.

Thank you. I hope that answers your question.

Yes, thank you.

Thank you. And your next question comes from the line of the Uy Ear from Mizuho. Please go ahead.

I'm taking your questions. So I have a couple. So just following up on the previous question, at these sites that enroll patients previously, could you maybe elaborate on, or remind us just like were most of these patients referral, by physicians and were there large volumes of patients, or were just a few patients at these sites? Yes, so that's sort of the first question. And I'll ask a second question after that? Thanks.

Yes, sure. Thank you. The study, there were two sites, with together they enroll about 20% of the Study 301, the adjunctive treatment study. And that they've never been present in 302. And then, there were a couple of issues there. We don't really know, why the data of these two sites, were the opposite, or completely different, from the other 41 sites in the trial. But, just to accept that, that was reality. But they've never been in the Study 302. And now, we - are limiting the number of patients enrolled, for each site. So, we won't have any site that, will like make a major impact on the final number. So, we feel confident that with these measures, we won't, what happened in the Study 301, will not happen again.

Okay.

Yes, if I could add one other quick thing. Another modification we made, was requiring medical records, to ensure that these were legitimate patients, who actually were taking an antidepressant. And that was not done in the 301 Study. So that's another improvement we've made.

All right, thanks. And maybe more presently, could you provide some color, on maybe the proportion of patients, who've been so far enrolled in RELIANCE II? And maybe RELIGHT as well? And after that, maybe just briefly, Maged, like just tell us, help us think, to think about, how to model the gains of spending. Is it sort of relatively flattish, or would it sort of, go down towards the end of the year? Thanks.

Yes, I'll take the first one. We may not want to go like in real details, about number of patients, but like we passed half of the trial, at the end of last year. And well, it's progressing steadily with some variability, maybe week-to-week. But it's on track. And we are confident that the, we are top line data in the second half of this year. Like when we get closer, we'll be a little bit more precise. And, but we - stay with, these a little bit broad guidance about second half of this year. And reason being that we are screening a quite a bit of patients. I mean, I don't well - the number of screen patient is very large. What we have noticed with the improvement on the protocol, clearly the screening failure, it went up significantly. We were around 50% on the previous trial. I think I mentioned that before. We are now approaching 80%. So I mean, the selectivity in enrolling patients is - it's much higher. We did look, if I can expand on the reason why, these patients are not enrolled, and have been screened, and they are legitimate reasons. And so, these are the patient that, generated the issue in the previous trials. And definitely we don't want these kinds of patients again in the new trials. So, the screening process, it's going very, very well. And the screening failure for legitimate reasons, it's much higher. So, we do believe that the quality is very, very good in this trial. I don't know, Andrew, if you want to add something.

No, I think you've said it well. It's in line with what I said earlier. We're really trying to make sure we have the right patients, with legitimately with the illness, and not patients with mild depression, or who are not legitimate patients. So, we're really trying to be careful, about selecting the right patients.

Maged, I think - the second one is for you.

Sure. Yes. So hi, Uy. Thanks for the question. So, G&A experiments, should follow the pattern we've had in 2023 on a quarterly basis. A lot depends on enrollment patterns, but our current expectation, is that R&D should pick up a little bit in the third quarter. And then, excuse me, in the first quarter, in the first quarter. And then again, increase in the second quarter. And then, stay at that level through the third and fourth quarter. As you can sort of see, enrollment pick up in 302, and then pick up in 304 as well. So I hope that helps.

Very helpful. Thank you.

Sure. My pleasure.

Thank you. And your next question comes from the line of Andrew Tsai from Jefferies. Please go ahead.

Hi, good afternoon. Thanks for taking my question. So first one I noticed in your prepared remarks, you said how you're monitoring sites in real time, making changes accordingly. So, what exactly, are you monitoring for, and what kinds of changes, are you making on a day-to-day kind of basis? And then secondly, are there any learnings, or thoughts that you might have, on Sage's recent rejection for their MDD study? And sorry, not study, but the approval. And if there's any read-through or any lessons learned that you think you could apply to REL-1017? Thanks.

Thank you, Andrew, and thanks for the call. I will ask you after to repeat the second question, because I didn't get it 100%. But the first question is, I think Andrew can go a lot more in detail, since he has run his site for 30 years, and has done many, many CNS clinical trials. But there is no magic, right? You monitor in general, you monitor every like three, four patients, four, five patients enrolled by the site. How the blinded data they look like. Of course, they're blinded, so you don't know, if they are good. But you definitely can have a good understanding if there is something wrong, right? When you have data that, the variability week-over-week of the first four week, is one week up, one week down, and you go up and down, usually that's not the behavior that, placebo and the drug do, right, but there is a trend. There is a trend, so that's one signal. And then the overall quality of the site, right? How the quality is documented in data. They put the data in the database. So there is, no one single factor. Is there a combination that, can give you some sense, if the site is providing like the service that we would like to? Andrew, I mean, you have done this for a long time. Do you want to add anything?

Yes. Yes, there are various quality indicators you look for. And I think we're watching, reminding the store, much more closely here. You look for things like, are the rating scales consistent? Are they kind of all moving in the same direction? You look for adherence to the protocol and what we call protocol violations, which indicates sloppiness. This time, we're being careful to not let, as Sergio said, any sites just kind of get off to the races and recruit, too many patients or too fast. So, there are a variety of quality indicators you look for and consistency things you look for, as Sergio said, and we're watching those. And then if there's a site that has issues, we're actually stopping their enrollment. We're trying to figure out what's going on, and deciding if we want to continue with them or not.

Hope that answers your question, Andrew. And if you don't mind to repeat the second one because I didn't get it.

Oh, perfect. Sage recently had their NDA rejected for MDD. And I'm just curious, if the reason behind that rejection, has any bearing, or read through to your as methadone basically?

Yes. Sergio, maybe I could help. Maybe I could help.

Yes, you're in, go ahead.

Because, I was very involved with that. It's really apples and oranges. Their paradigm was very different. It was a two-week treatment paradigm, with a very different mechanism. And really the problem, was they didn't have a good story, for how two weeks of treatment, would hold a charge. And in their Phase 2 study, there was a suggestion that, the efficacy continued on beyond the two weeks. However, it was not well replicated in Phase 3. So the FDA, had concerns about that. It's a very different paradigm, very different medicine. I don't see it as a competition, as an issue, or anything that would influence what we're doing.

Makes sense. Okay. Thank you very much.

Thank you, Andrew's. Both of you.

Thank you once again [Operator Instructions] And your next question comes from the line of Andrea Tan from Goldman Sachs. Please go ahead.

Good afternoon. Thanks for taking our questions. Sergio or Andrew, just curious if you're able to share what RELIANCE II and the RELIGHT studies, are powered to detect, and remind us what you're assuming here for placebo response?

Yes, it's great. Thank you, Andrea, for the question. Well, we haven't filed with the FDA, the final statistical plan. You usually do it at the very end. There is no advantage, to do it before. But as a fair assumption that usually what you want to detect is a clinically meaningful effect that, according to the expert in adjunctive treatment, is like 2.5 points. So the trial is designed, to detect that kind of a change from placebo. And that is right. That would be the minimum, right? We hope we can do better than that, based on the Phase 2 data, but that's a fair assumption. That would be the statistical plan. And with 300 patients enrolled, right? It is feasible, it's realistic.

And then maybe just one quick question on REL-P11 here. Just I wanted to confirm, which indication you're looking to study this in?

Yes, we actually did not discuss the indication. Reason being that we don't really know exactly, what kind of indication - we will look at. Like with the - we have to do Phase 1 and for like pharmacokinetic, all the parameters, the new formulations, the new concept, low dose chronic treatment. What we can see, is the effect that had on the rodent model that, according to the expert, it's somewhat relevant, for what should happen in human. And what we have seen is that, there is a material decrease in body weight with no diet, with continuing the high fat, high glucose diet. So despite like high fat and high glucose diet, the rodent, they lost weight, not as much as a GLP-1, but enough to make it like a valuable drug, to treat obesity. But at the same time, we have seen a material decrease in glucose level, like similarly, probably a little higher than metformin. And we have seen a very material effect on fat deliver. And all these, like continuing a diet with high fat, high glucose. So it kind of works on all the span of parameter metabolic syndrome. So weight, glucose, and fat deliver. So I mean, the fair assumption that the indication will be a metabolic one. We haven't decided yet, and will be decided after Phase 2. Through a concept specifically, what the indication will be that, could be like, maybe not obesity by itself, but now it could be also combination with the GLP-1, and to overcome some of the limitation of the GLP-1, like muscle loss. But now the, we need to see the data. And there is like a wide range of possibility all on the metabolic area, and that does suitable. And we'll try to do something that is, a reasonable, good way to get the drug approved in a relatively short amount of time. And I don't have the straight question, yes, the straight answer, but that's where we are now. Waiting for, efficacy data, to make the final decision where to go.

Got it. Maybe just one follow-up there. Have you seen evidence to-date preclinically that you are avoiding loss of muscle when you've tracked the weight loss in these rodents?

Well, in the preclinical, no, we haven't looked at, we haven't seen it, because we haven't looked at it. And the, but it's a fair assumption that, right, since there is no change in diet, right, the model, the rodent don't lose weight, because they stop eating, or they reduce the food intake, like with GLP-1. So it, psilocybin is 5-HT2A agonist, and it acts at the metabolic level. So pretty much it increase, the metabolism of fat. So mechanistically is not really expected to have loss of muscles, unlike the GLP-1.

Okay. Thanks everyone.

Thank you, Andrea.

Thank you. And your last question comes from the line of [Velma Furiati] from Guggenheim. Please go ahead.

And good afternoon. Thank you for taking our question. This is Velma Furiati. So following up to the previous questions, can you clarify if you already performed the real-time stat checking in the previous RELIANCE studies, or is it something that you have implemented new only now? And then I wanted to ask you about the statistical plan, if that is run by a third-party, or internally within the company? Thank you.

Thank you for the question. If I understood correctly, the first question is that we did implement a monitoring of the sites in the study, in the previous studies, and the straight answer is no. And, it was COVID, was a little bit more complicated, to do it than now, and we didn't do it. So, but that's only one of the changes operational that, they've made in the new protocol. And so, that was one, but the required for medical record, is probably the biggest one. And so, I mean, the old goal, as we discussed, a few times, or many times, is to really enroll patients that, are affected by biological depression, and they have a history, this is an adjunctive trial. So, the patient has to come in, already on some antidepressant and, to have access to medical and pharmacy records. It's a good proxy, to be sure that the patient, is a real patient. These are things that we didn't do, in the previous trial, for a variety of reasons. And so, sorry, can you repeat the second one?

And yes, I was asking if the statistical plan is designed by a third-party, or internally within your company?

Yes, no, it is, well, it is, design is a collaboration. And so, but it is, we have the help of it, like a large statistical company independent that advise us, on the statistics.

Got it. Thank you.

Thank you.

Thank you. There are no further questions at this time. Mr. Traversa, please go ahead.

Well, thank you, and in summary, we remain confident that, we do have an approvable drug in REL-1017, and are excited by the potential of our novel psilocybin, and derivative program. So, we look forward, to reporting on progress, with our pipeline - in the months ahead. And to close, I'm grateful to the Relmada team, for their continued hard work and dedication to executing on our mission. And I would also like to extend my sincere thanks, to the patients and clinical partners involved in the REL-1017 trials, for their participation in the advancement, of this promising investigational medicine, through development. Thank you very much to everyone.