Relmada Therapeutics, Inc. (RLMD) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Relmada Therapeutics, Inc. Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Wednesday, November 8, 2023. I would now like to turn the conference over to Tim McCarthy of LifeSci Advisors. Please go ahead.

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; and Dr. Cedric O'Gorman, Chief Medical Officer. This afternoon, Relmada issued a press release providing a business update announcing financial results for the 3 and 9 months ended September 30, 2023. Please note that certain information discussed on the call today is covered under the safe harbor provision 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, 2022, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, November 8, 2022. 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 would like to turn the call over to Sergio.

Thank you, Tim. As always, and good afternoon to everyone, and welcome to Relmada's Third Quarter 2023 Conference Call. We have achieved some important clinical milestone recently in the ongoing Phase III program for REL-1017 in a major depressive disorder or MDD as well as in our promising preclinical novel psilocybin program that I will briefly cover today. Following this, Maged will review the third quarter financial results, and then we will take your questions. Let's begin with an update on the Phase III program for REL-1017, which continues to proceed this planned. As a reminder, 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 III 2-arm, placebo-controlled pivotal study evaluating rate REL-1017 25-milligram for adjunctive MDD. The amended stud 302 protocol has been implemented across all our clinical sites. Enrollment is progressing as we leverage our close relationship with the study sites and a number of ongoing initiatives to drive trial awareness with prospective patients. As a reminder, we are planning to enroll approximately 300 patients and continue to expect that Reliance II will be completed in the first half of 2024, most likely toward the end of the first half, so around media. In the second Phase III trial of REL-1017, named Relight or study 304, we begin dosing patients during the third quarter. Relight also has a planned enrollment of approximately 300 patients. Completion of enrollment in this trial continues to be anticipated in the second half of 2024. To reiterate what we have said previously, like Reliance II, Relight is a randomized, double-blind, placebo-controlled 4-week trial evaluating the efficacy and safety of REL-1017 as an adjunctive treatment for MDD in patient experiencing inadequate response to ongoing background antidepressant treatment. The primary endpoint of both studies is the same. The change in the MADRS total score from baseline to day-28 for REL-1017 as compared to placebo. Also, during the third quarter, we announced efficacy and safety results from the open-label 1-year safety study for REL-1017, Study 310 or 310. These long-term safety exposure data are required for the purpose of the NDA filing. More specifically, in September, we shared efficacy results for the 204 de novo or new to treatment patients and safety results for all 627 study subjects. Study REL-1017, 3-1-0, 310 was a long-term open-label -- noncomparative open-label registrational Phase III trial designed to evaluate the efficacy and safety of REL-1017 administered 1 daily in patients with MDD for up to 1 year. I will now reiterate some of the previously communicated results in the de novo patients. Rapid and sustained improvement in MADRS score were served in -- with REL-1017 in the de novo patient and the entire study population. As the de novo patients reflect a more reliable picture of the reward condition, I will like the de novo patient results. The mean MADRS score -- total score was 33.8 at baseline. Treatment with REL-1017 in this patient resulted in mean improvement from baseline in the MADRS total score of 16 points at month 1, 19.9 points at month 3 and 6 and 22.5 points at month 12. High rates of clinical response both rapid and sustained were seen in de novo patients. When treated with REL-1017 in the MADRS total score at day 7, 26.6 patients of the de novo patient achieved clinical response that is defined as the greater than or equal to a 50% improvement in the MADRS score, which increased to 51% by month 1 and 77.2% by month 12. [indiscernible] absence of the pressing symptoms or clinical remission was achieved by 12.1% of the de novo patients at day 7, which increased to 30.1% at month 1. And then again, 54.4% at month 12. Clinical remission is defined as the MADRS total score of less than or equal to 10. In summary, patients treated daily with REL-1017 for up to 1 year experienced a rapid, clinically meaningful and sustained improvement in depressive symptoms and associated functional impairment. Importantly, the overall MADRS change in response and remission results in study REL-1017, 310 for the de novo patient and the full analysis set were consistent in both groups. For all the REL-1017, 310 subjects, REL-1017 was well tolerated with long-term dosing, shown low rates of adverse events and discontinuation due to adverse events. No new safety signals were detected. Moving now to our promising preclinical novel modified release psilocybin program. At next week or this weekend AASLD meeting, the new data will be presented in the poster presentation. The data demonstrate the beneficial effect of non-psychedelic/low dose psilocybin on multiple metabolic parameters in a rodent model of metabolic dysfunction associated steatotic liver disease or MASLD. As a reminder, there are no currently approved drugs for MASLD and this initial preclinical results support the therapeutic potential and of non-psychodelic/low-dose psilocybin. Based on this data, non-psychedelic/low dose psilocybin could improve lipid and glucose levels with potential for fewer side effects over other investigative treatment approaches, such as the GLP-1. We intend to initiate a single ascending dose Phase I trial in obese patients with steatotic liver disease in early 2024 to define the pharmacokinetic safety and tolerability profile of our modified release psilocybin formulation in this population. Followed by a Phase IIa trial in the same patient population to establish clinical proof of concept. Moving on, Maged will provide a detailed review of our financials. But I would like to emphasize that Relmada remains sufficiently funded to fully execute our plans to reach data readouts for both REL-1017 Phase III trials, Reliance II and Relight. I will now turn the call over to Maged to review our second quarter financial results. Maged?

Sure. Thank you, Sergio. Today, we issued a press release announcing our business and financial results for the 3 and 9 months ended September 30, 2023, which I will now review. For the third quarter ended September 30, 2023, total research and development expense was approximately $10.5 million as compared to $30.5 million for the comparable period of 2022, a decrease of approximately $20 million. The decrease was primarily associated with the completion of Reliance I, that's study 301 and Reliance III, study 303 in late 2022. The noncash charge related stock-based compensation totaled $1.7 million in the most recently completed third quarter. Total general and administrative expense for the third quarter ended September 30, 2023, was approximately $12.2 million as compared to $8.2 million for the comparable period of 2022, an increase of approximately $4 million. The increase was primarily driven by an increase in stock-based compensation. This noncash charge totaled $9.6 million in the most recently completed third quarter. Net cash used in operating activities for the 3 months ended September 30, 2023 totaled $11.6 million compared to $26.9 million for the 3 months ended September 30, 2022. For the third quarter ended September 30, 2023, the net loss was $22 million or $0.73 per basic and diluted share compared with a net loss of $39.4 million of $1.31 per basic and diluted share in the comparable period of 2022. Turning to the results for the 9 months ended September 30, 2023. Total research and development expense was approximately $40.1 million as compared to $86.5 million for the comparable period of 2022, a decrease of approximately $46.4 million. Again, the decrease was primarily associated with the completion of Reliance I, study 301 and Reliance III, study 303 in late 2022. The noncash charge related to stock-based compensation totaled $5.5 million in the most recently completed 9-month period. For the 9 months ended September 30, 2023, total general and administrative expense was approximately $36.8 million as compared to $36.1 million for the comparable period of 2022, an increase of approximately $700,000. The increase was primarily driven by an increase in stock-based compensation. This noncash charge totaled $28.5 million in the most recently completed 9-month period. Net cash used in operating activities for the 9 months ended September 30, 2023, totaled $41.4 million compared to $67.9 million for the 9 months ended September 30, 2022. For the 9 months ended September 30, 2023, net loss was approximately $73.6 million or $2.45 per basic and diluted share compared to a net loss of $119.1 million or $4.04 and for basic and diluted share in the comparable period of 2022. As of September 30, 2023, we had cash, cash equivalents and short-term investments of approximately $106.3 million compared to approximately $148.3 million as of December 31, 2022. Again, cash used in operations for the third quarter was $11.6 million. Based on our clinical development plan, our current cash position provides us with ample runway through the end of 2024. Of note, this time period, as Sergio mentioned, includes data readouts from both Phase III trials for Reliance II, that's study 302 and Relight that's study 304 as well as the initiation of our planned Phase I trial for our modified release psilocybin formulation. And I'll turn the call over now to the operator.

[Operator Instructions] Your first question comes from Marc Goodman, Leerink Partners.

This is Basma on for Marc. Congratulations on the quarter. I had a question regarding the Reliance-OLS study. Would this study conducted the same sites as Reliance I and Reliance III. And I also had a question about Reliance I and Reliance III regarding the patient characteristics. Can you remind us again about the average age of the participants after you look at the data after you unblinded the data? And have you noticed any correlation between the inaccurate diagnosis of MDD and the age of the participants?

Great. Well, thanks for the question. I do believe that Cedric, our Chief Medical Officer, is the most appropriated to address them. Cedric?

Yes. Thanks, Sergio, thanks for the question. So yes, as is very common when you have controlled trials, you also have an open-label extension trial that's offered. So therefore, yes, the sites that were part of Reliance I and Reliance III also had the opportunity to be part of the open-label study and contribute subject to that long-term study. Remember -- there was a question then about the average age and these studies are run in adults 18 to 65 years of age. And of course, you know that major depressive disorder is represented at a 2:1 ratio in females than males. We haven't looked at age breakdown. There's lots of interesting analysis that we will do. But can't comment on a correlation or outcomes by age. But the average age was probably in the area of the 40s or 50s.

Your next question comes from Uy Ear, Mizuho.

This is Charles on for Uy. I guess, I kind of had a follow-up question to that. If there was any other read-throughs from the open-label de novo patients to the Phase III studies? And then also if you saw a difference between adjunctive and monotherapy patients from that open-label.

Thanks, Charles. It's Sergio here. Let me try to give you a little bit more like top-down and then Cedric can go more in detail. And so learning look, the long-term safety study is 12 months. And the -- we look at the MADRS improvement data. And the conclusions are simple but significant and material because these represent real-world experience. So what we have seen is that there is a rapid effect and there is a clear effect and the 70-plus percent of the patient responded after 3 months -- 12 months. And the -- this sustain. So there is no loss of efficacy over time. And the safety has confirmed that the drug is extremely safely and well tolerated. So these are really the key learning in a real-world experience. The answer of the question there is a difference in the adjunctive and monotherapy. In the 12-month study is not really like very significant to make a difference. It was not the -- it's a mix. So it's very -- it would be unfair to separate monotherapy from adjunctive because we don't know if in 12 months or people do that somebody take medication, they stop them, somebody doesn't take them. So it would not be a reliable information. I mean we look at the de novo and the overall population that come from the 2 Phase III studies. It's over 500, 600 patients there is really no difference that would be Relmada, let's put it in this way. There is no subset of patients that would spike either way that the drug didn't work well or they work extremely well. It's pretty consistent, and that makes us comfortable because it's a real world experience. Cedric, do you want to add anything to my remarks.

I think you said it all, just to confirm what you said that there's this consistent improvement trajectory with rapid onset the de novo or the -- it's the ideal group to look at when you're looking at efficacy in the open label because that study isn't as well controlled as our placebo-controlled trials on who gets in. So there's a lot of subjects, and you don't -- and a lot of common medications that they're on. So it's quite a mixed bag. But one thing is consistently observed is that whatever the treatment setting, patients do better quickly with really high response and remission rates in the open label and consistent trajectory as we've also seen in the controlled trials.

Your next question comes from Andrew Tsai, Jefferies.

This is [ Zenah ] on for Andrew. We just had a couple of quick questions. What are each of your 2 Phase III studies sort of power to show in terms of matter separation versus placebo? And a question for Cedric, operationally speaking, how can you say with high confidence the study integrity for the 2 Phase III studies and 1017, are similar to how Axon successful studies were run. Are you seeing a lot of similarities between those 2 programs? And if you could just elaborate on that.

Yes. Thanks, [ Zenah ]. Maybe Cedric should answer that. The -- maybe I just would like to try to answer your last question, right, on the comparison with Axon and Cedric runs both the trials, running our trial and run Axon trial, but these are very, very, very different drugs. So I don't know how much would be reliable to compare the 2 programs. And Cedric, do you want to try to answer?

Sure. Yes. No, I think that -- I think that anybody who's in the drug development space, particularly in major depressive disorder, very much strive to run a high-quality program as possible. And that really comes down to 3 things: the protocol, the site selection and subject selection. And so it doesn't matter which sponsor you work for, you want to have a very tight efficient protocol that aims to reduce placebo response. And then you want to work with the best sites that are conducting MDD trials. And of course, those of us who work in clinical research for depression know that there are always the same sites, known to the sponsor. So you would expect that there would be knowledge and familiarity because these sites are the best in major depressive disorder. And then you just have to very carefully have an eligibility process that makes sure that you're avoiding -- that you're getting the right patient with confirmed diagnosis of MDD and you're avoiding professional patients. And you're doing everything from a subject selection process as well that might minimize recruiting or enrolling patients or subjects, I should say, who may be prone to having a high placebo response. So you do that across the program. And I have to say that I'm very pleased with how rigorous our eligibility processes in letting subjects into the trial. And the question on the statistical powering, we haven't actually revealed that yet. So I mean it would be reasonable to -- if you take the Phase II data, and if you were to consider 301 and 303, where placebo was controlled to about 10 or 11 points improvement on the MADRS. You could probably figure out how we're powering it because we are targeting approximately 300 subjects as Sergio mentioned at the beginning. So I hope that helps a little bit there with an answer to your question.

Can I add just one quick point? According to the KOLs and the history literature, a difference in MADRS score versus placebo 2, 2.5 points is considered clinically meaningful and enough for approval. So you may imagine that we will file the statistical plan in -- according to these parameters. So the statistics will be set up to detect a MADRS difference from placebo that is clinically meaningful and good enough for approval. Hope I answer properly your question.

[Operator Instructions] Your next question comes from Yatin Suneja, Guggenheim.

This is Delma for Yatin. So I have a few questions on the psilocybin program. I just wanted to ask you, if you have already filed the IND for the Phase I trial and how many doses are you planning to use there? Are there any of these sources expected to trigger a psychedelic experience?

Sorry, I answered the first -- it's Sergio here. The first part of the question, then if you don't mind to repeat the second one because I couldn't hear you very well. So no, we haven't filed the IND. We are on the process to prepare the IND and I do believe will be filed relatively soon, but we are planning to start the Phase I single dose [indiscernible] in Q1 next year. So let's say, 2, 3 months from now. Can you please repeat the second part?

Yes, sure. I was just asking if you have -- how many doses you're planning there? And if any of these dose is expected to trigger a psychedelic experience?

How many doses? No, we haven't finalized and the exact dose regimen will discuss in the IND. But what I can share with you is what will be the dose-limiting toxicity. And it is not real toxicity because we know that psilocybin is well tolerated from the literature in the history and from other programs that are ongoing, they are using 20, 25 milligrams in a single dose and we will use 1/10 of that. So we -- it's a fair assumption that the dose will be using will not be toxic or not well tolerated in general term. But the dose limiting toxicity, we are trying to determine is when you start to have psychosomatic -- psychological, psycho symptoms putting in this way, when you start to feel that the drug is affecting your psych. So we are developing a low-dose, extended release that is non-psychedelic. So the dose-limited toxicity will be the psychedelic effect. We don't know exactly what the dose is, but we assume that it will be below 3, 4 milligrams daily.

There are no further questions at this time. Please proceed.

Well, thank you. Look, in summary, we remain confident that we do have an approvable drug in REL-1017, and we are excited about the potential of the novel psilocybin and derivative programs. We look forward to reporting the progress with our pipeline in the months ahead. And I do remain grateful to the Relmada team for their continued hard work and dedication to executing on our mission. I would 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 to development. Thanks a lot to everyone, and we'll reconnect soon.

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.