Relmada Therapeutics - Q1 2024

Transcript

Operator (participant)

Good afternoon, ladies and gentlemen, and welcome to the Relmada Therapeutics Inc. first quarter 2024 financial results conference call. At this time, all lines are in listen-only mode. Following the presentation, we'll conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, May 8th, 2024. I would now like to turn the conference over to Tim McCarthy, LifeSci Advisors. Please go ahead.

Tim McCarthy (Managing Director and Relationship Manager)

Thank you, Colin, 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 months ended March 31st, 2024. Please note that certain information discussed on the call today is covered under the Safe Harbors 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 31st, 2023, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 8th, 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 would like to turn the call over to Sergio. Sergio?

Sergio Traversa (CEO)

Thank you, Tim, as always, and good afternoon to everyone, and welcome to the Relmada first quarter 2024 conference call. We continue to achieve meaningful progress in the advancement of our 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 first quarter 2024 financial results, and then we will take your questions. Let's begin with an update on the late-stage phase 3 program for REL-1017. As a reminder, Relmada is focused on developing REL-1017 as an adjunctive treatment for MDD. We previously executed important revisions to Reliance II, the ongoing Study 302, which is a phase 3, two-arm, placebo-controlled pivotal study evaluating REL-1017 25 milligrams for adjunctive MDD. These modifications were aimed at controlling placebo response and improving the profile of patients enrolled.

The amended Study 302 protocol has been implemented across all of our clinical sites. Enrollment continues to advance, and our ability to leverage our close relationship with the study sites continues to play a critical role. Moreover, the ongoing initiative we put in place to drive trial awareness with prospective patients is also generating positive results. As we said on our last call, we are evaluating the quality and productivity of sites on a real-time basis and making tweaks as appropriate. As a reminder, we plan to enroll approximately 300 patients into Reliance II. Based on our current projection, we continue to expect Reliance II to be completed with top-line data anticipated in the second half of this year. We are also continuing to enroll those patients in our second phase 3 trial for REL-1017, Relight, or Study 304 that also has a planned enrollment of approximately 300 patients.

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 of MDD in patients 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. I would like to emphasize again that we have made meaningful revisions to our screening and enrollment processes in order to ensure that we have patients that meet all of the qualifying criteria within our desired patient profile. To this end, we are now executing on a comprehensive adjudication process through which we require medical and pharmacy records for all patients enrolled in Reliance II and Relight.

Given this, the screen failure rate in this study has increased to approximately 80% versus approximately 50% in Reliance I and Reliance III, our previously completed phase 3 trials of REL-1017. However, we are highly confident that these changes will substantially enhance the probability of success of the current studies. I would also like to highlight that we have completed all of the necessary preclinical manufacturing and phase 1 studies required for a potential REL-1017 NDA filing, and our current focus is on executing the remaining 2 phase 3 studies, 302 and 304. Moving on now to the promising novel modified release psilocybin program.

We continue to anticipate the initiation of a single-ascending dose phase 1 trial in obese patients in the first half of this year to define the pharmacokinetic safety and tolerability profile of our modified release psilocybin formulation in this population, followed by a phase 2A trial to establish clinical proof of concept. Data from the planned 2A study is anticipated in the first half of 2025. These planned studies will build on the compelling preclinical data that were presented in a poster presentation at last November's AASLD meeting, the liver conference. These results showed 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. Based on this data, low-dose psilocybin could improve lipids and glucose with potential for fewer side effects over other investigative treatment approaches such as GLP-1 glucagon and GIP.

So to summarize our multiple upcoming key milestones over the next 12-18 months, we anticipate the ongoing Reliance II study to be completed with top-line data in the second half of this year. In addition, we anticipate initiating a phase 1 clinical trial for our modified release formulation with psilocybin before the end of the current quarter. Lastly, while Maged will provide a detailed review of our financials, I would like to highlight that we continue to advance our pipeline for a position of significant financial strength with cash on hand to take us comfortably into 2025. I will now turn the call over to Maged to review our first quarter financial results. Maged?

Speaker 5

Thank you, Sergio. Today, we issued a press release announcing our business and financial results for the three months ending March 31, 2024, which I will now review. For the first quarter ending March 31, 2024, total research and development expense was approximately $13.3 million as compared to $15.9 million for the comparable period of 2023, a decrease of approximately $2.6 million. The decrease was primarily associated with the completion of the long-term open-label study, Study 310, in the third quarter of 2023, as well as Reliance I and III. The non-cash charge related to stock-based compensation for R&D totaled $1.7 million in the most recently completed first quarter. Total general and administrative expense for the first quarter ending March 31, 2024, was approximately $9.7 million as compared to $12.3 million for the comparable period of 2022, a decrease of approximately $2.6 million.

The decrease was primarily driven by a decrease in stock-based compensation expense. The non-cash charge related to stock-based compensation for GAAP totaled $6.6 million in the most recently completed first quarter. For the first quarter ending March 31, 2024, the net loss was $21.8 million or $0.72 per basic and diluted share compared with a net loss of $26.3 million or $0.87 per basic and diluted share in the comparable period of 2023. As of March 31, 2024, we have cash, cash equivalents, and short-term investments of approximately $83.6 million compared to $96.3 million as of December 31, 2023. Cash used in operations in the first quarter of 2023 was $13 million. Based on our clinical development plan, our current cash position provides us with comfortable runway into 2025. I will now ask the operator to please open up the call for questions. Operator?

Operator (participant)

Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. If you'd like to ask a question, please press star, followed by one. If you'd like to withdraw your question, please press star, followed by two. If you're using a handset, please lift the handset before pressing any keys. Your first question comes from Mark Goodman from Leerink Partners. Mark, please go ahead.

Speaker 5

Hi, this is Basma for Mark. I had a question about the Reliance and Relight trials, the ongoing Reliance and Relight trials. You actually mentioned something that you were monitoring the trials, monitoring the looking at the blinded data before in the previous call, in the fourth Q earnings call. Can you provide some color about those kind of blinded data from what you see right now from the Reliance and Relight if you compare to the prior trial that had larger placebo response? Do you see any similarities? Do you see any difference? Just to give us some color about the strategy that you implemented to reduce the placebo response. Thank you.

Sergio Traversa (CEO)

Yeah, sure. And thanks for the question. I'll give you the top-down answer, and then we have Dr. Andrew Cutler. He's our clinical advisor on the call. We'll provide a little bit more details about this aspect. Well, first, let me say something about the blinded data, right? There is absolutely no way to guess from the blinded data the outcome of a clinical trial. And we experienced that in the last 2 trials that we had. So the help that we can get or everybody can get from monitoring the blinded data is only and exclusively to see if there is something that it's not that doesn't make—I can't find the right word, but that is not consistent, right?

For a given example, if there are individual patients with the MADRS scores week over week that goes up and down, or we call it zigzag, then you know that there is something that is not right. It can be the patient or it can be the site. But usually, a patient that responds is consistent over four weeks, and if it doesn't respond, it's still consistent over the four weeks. So if you see a zigzag, that's a signal that something is not consistent. And so we take a look to that, to the patients, and mostly to the site. So that's really the only help that you can get from the blinded data. But it is important, right, to continue to monitor to see that not many of these patients with this zigzag pattern get into the trial.

When it's in, there is nothing we can do, but we can at least revise and advise the site that something is kind of like a red flag. And Andy, you are on the call. Would you mind to provide some more details about it?

Andrew Cutler (Clinical Advisor)

Yes. I absolutely agree with what Sergio said. What you look for is consistency and quality indicators. In addition to what he said about the primary, the MADRS zigzagging, you also look for consistency across different scales. The key secondary outcome, of course, being a CGI, usually that moves in the same direction as the MADRS, which is measuring depression symptoms. So you look for that. I would say also that in the previous trial, sites were allowed to enroll rather quickly without watching the quality as closely as we're doing now. And that can certainly be a problem. So we're now really being much more careful with the enrollment, not allowing a site to over-enroll patients until we've looked at the quality, monitoring the quality of each site and the trial overall. And I would say things are looking fine from that point of view at this point.

Sergio Traversa (CEO)

Thank you, And. I hope that answered your question.

Speaker 5

Thank you.

Operator (participant)

Your next question comes from Andrea Tan from Goldman Sachs. Please go ahead.

Speaker 5

Hi, Sergio. Thanks so much for taking the question. Maybe one follow-up to your remarks right there. As you are monitoring the sites, if you do see the inconsistencies that you've just spoken about, maybe walk us through what steps then you would take to remediate those issues. And then I have 1 follow-up question. Thank you.

Sergio Traversa (CEO)

Yes. Good afternoon, Andrea. Thanks for the question. As before, I will give you the short answer, and then Andy, if you would like to provide a little bit more details. In general, well, first, do you contact the site and you discuss any details regarding patients or patients that have some inconsistency? Then you go through the whole process. Ultimately, if that becomes a pattern, you don't want to have a site that shows inconsistency enrolling 10, 20 patients because that would affect the whole trial. The ultimate measure is to close the site. Andy, I'm sure I can give you a little bit more color on this.

Andrew Cutler (Clinical Advisor)

Yeah, that is well said. The most important thing is to not allow a site to continue to enroll patients and have problems like that. And so, as you know, if 1 site has too many patients, 1 or 2 sites, that can kill a trial. But also, if you do see this well, first of all, the site also knows, having run sites, the site knows now if you're looking over my shoulder and you're going to call me, it really does make them be on their best behavior, if you will, and not cut corners. But ultimately, we have closed down some sites that had quality issues. So ultimately, what you do is you just stop them from enrolling so that they don't have a chance to hurt the study.

Speaker 5

Okay.

Sergio Traversa (CEO)

Thank you, Andrea.

Speaker 5

Andy, can you just remind us quickly, are you planning on having an interim analysis, or is there going to be any type of mechanism in place for the DMC to recommend stopping the study early as they have in your prior trial?

Sergio Traversa (CEO)

We will have not we, but the data monitoring committee will have a look at the data at some point, very close to the end. But this is not an interim analysis because there is no statistical penalty. It's a sample reestimation. They will let us know if the sample that we have in the trial is enough to reach statistically significant or if we have to expand the trial. There is no early stop planned.

Speaker 5

The other major function of the DMC, of course, is to monitor safety. The good news is the safety and the tolerability have looked very good.

Great. Thanks so much.

Sergio Traversa (CEO)

Thanks, And Thank you, Andrea.

Operator (participant)

Your next question comes from Andrew Tsai from Jefferies. Andrew, please go ahead.

Speaker 4

Hey, congrats on the progress. This is Matt calling in for Andrew. And I guess continuing with the same theme, do you have any specifics on the numbers of sites that you've had to pause, close, or been able to even reopen using your monitoring, real-time analysis? And then also, we've seen.

Sergio Traversa (CEO)

Sorry. No, maybe it's me, but I can barely hear you.

Speaker 4

Okay. Can you hear me better now?

Sergio Traversa (CEO)

Oh, much better. Yeah. Thank you. Sorry for that.

Speaker 4

Okay. Yeah, no problem. So yeah, I was just asking, continuing with the real-time site analysis, if you'd had any specifics on the number of sites that you've had to pause, close, or maybe even reopen? And then also, over the past year, we've seen quite a few companies that have announced delays, for instance, schizophrenia and epilepsy spaces. And are you seeing any increased level of competition in terms of funding the right MDD depression patients? And then I.

Sergio Traversa (CEO)

Well, thanks for the question. Yeah. Thank you very much for the question. So in terms of sites, right, the site selection is not like a fix that you decide 50, 60 sites at the beginning, and you finish with the same sites. It is an ongoing process. So constantly, there is a revision of sites. And some site is closed not only for quality issue, also for the competing studies or they exhausted the patient population that they can enroll into the site. So it is an ongoing. I don't have on the top of my mind a really specific number, but it's not like that at some point you do a review. It's an ongoing process. So maybe Andy, when I finish, the other answer can give you a little bit more details because he runs clinical sites. So he is more into the detail of the process.

The second question, would you mind to repeat it?

Speaker 4

Yeah. Just the competing study.

Sergio Traversa (CEO)

The competing study, right?

Speaker 5

Yeah, exactly.

Sergio Traversa (CEO)

Yeah. Well, there is clearly some competition out there. And mostly, I mean, usually, a site cannot or does not take on 3, 4 studies that enroll the same kind of patients. In our case, it's a little bit particular because we are doing the studies are for adjunctive treatment of depression. So that's the competition. It's much less because there are not many other programs, especially in phase 3, that enroll patients in adjunctive. We do believe there was 1 other company that finished 1sizable, big study a few weeks ago. But I do believe that the majority of their sites were outside the U.S. So there was relative competition. It was not an antidepressant anyway. We keep on hearing that the psilocybin, there are a lot of trials ongoing with psilocybin in depression.

That is not really a direct competitor, but still, it keeps the sites busy and is high-dose psilocybin for PTSD and MDD. So yeah, to summarize, yes, there is competition, but we are in a specific indication where the competition is much lower. Andy, would you mind to provide a little bit more color?

Andrew Cutler (Clinical Advisor)

Yes. I'll answer the 2nd one first. And that is that Sergio is exactly right. At the site level, you don't want to take too many competing studies. Usually, though, the study criteria are different enough that you can do, say, two or three depression studies without significantly impairing because a patient will more clearly fit into 1 protocol than another. So as far as the first question, I don't have the exact number of sites that we've closed down offhand. But sites do close for various reasons. That's certainly true. But we have stopped enrollment at a couple of sites. I can say that. But it's not a lot, fortunately. And I think some of it is simply the process of overseeing the sites. Now, the sites know that they're being watched. They know that we're monitoring quality.

That often changes the behavior enough so that significant corrective action isn't necessary.

Speaker 4

Got it. Yeah. That makes sense. And then I guess regarding the phase 1 Psilocybin program that you're going to be kicking off soon, can you describe the study design and what positive data would entail?

Sergio Traversa (CEO)

Yes. It's very simple. We'll start with a Phase 1, a single dose, the starting dose of Psilocybin modified release. So the interesting part is the patient population. Or technically, Phase 1, you do it in a healthy volunteer. But it's well known that Psilocybin is a relatively safe product at high dose, and we are using a dose very, very much, much lower, like 1/20th or 1/30th of the dose that is used as a psychedelic for the treatment of psychiatric diseases. So on the safety side, we feel extremely comfortable. But the indication that we'll pursue for Psilocybin is into the metabolic space, so obesity and glucose and fatty liver. So the data that we are looking for is mostly PK data in obese patients.

The particular is the patient population that will be obese healthy volunteers, and which we should start over the next month or 2. We said within the first half. So we are getting there. It's a short study. So the whole study will last like 3-4 months maximum.

Speaker 4

Excellent. Thank you.

Sergio Traversa (CEO)

Thank you.

Operator (participant)

Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star, followed by 1. Your next question comes from Louir from Mizuho. Please go ahead.

Speaker 6

Hi. This is Charles for Louir. I had a question about kind of the screening failure rate and if you think that's going to kind of stay at 80% throughout the study enrollment. And then also, if you could clarify if Reliance II screening failure rate was also 50% before the new protocol. Thank you.

Sergio Traversa (CEO)

Hey, Charlie. Thanks for the question. And so yeah, the screening failure, it's high, but we look at the reason for the screening failure. And there are legitimate reasons, right? Usually, it's drug-drug interaction or concomitant mostly it's concomitant medication. So yeah, these are legitimate reasons not to enroll in the study. And most of the screening failure actually come from the site. And with that said, we are in constant review, and we listen very carefully to the feedback from the sites. And there is anything that we can do to increase the enrollment rate or decrease the screening failure, but without decreasing the quality and increasing the risk of the trial, we have been doing that. So there are certain things that have been, especially on the drug-drug interaction or concomitant medication more than interaction, that have been changing over time. So that should facilitate.

This is a back and forth from the company and the site. So yeah, they give us the feedback, and we see patients with that characteristic that it could fit into the trial, but we cannot put it in because of the inclusion and exclusion. So we revised. And in a dialogue with the FDA, of course, we have made a few detailed revisions of the protocol over time. So we don't know what we'll do to the screening failure, but definitely, there is a chance that we could get a little better. And the second question was at the beginning. Yeah, that's a great question, but I don't have the answer on the top of my head. And the screening failure at the beginning of 3 or 2, probably there are not a lot of patients enrolled. So I don't know how much that number is meaningful.

But maybe Andy or Maged, if they have some more color on that, the screening failure on the Study 302 before we amended the protocol.

Andrew Cutler (Clinical Advisor)

I don't believe it was quite the yeah. Go ahead, Maged. Sorry.

Speaker 5

Go ahead, Andy. Yeah, it was certainly not quite as high. I don't want to put a number out there without confirming with our internal team. So we'll have to get back to you, so.

Andrew Cutler (Clinical Advisor)

Yep. Exactly. But I would not be put off by screening failure. We're trying to find the right patients, and that's critically important. Patient selection is absolutely a source of failure in studies.

Sergio Traversa (CEO)

Okay. Thanks,.

Right. And sorry. Yeah. As we mentioned in some of our calls, right, 1 of the biggest changes, the amendment we made to the protocol is that there is now a requirement for medical and pharmacy records. And that's by itself increased the screening failure. But also, at the same time, you are relatively comfortable that that patient comes from a doctor that has diagnosed and prescribed medication and that the patient actually purchased the medication from the pharmacy. So the 2 things, they go together, high screening failure, but there is clearly an improvement in the risk profile of the patients enrolled. I hope that answers your question.

Speaker 6

Yeah. Thank you.

Operator (participant)

There are no further questions at this time. I'll turn it back to Sergio for closing remarks.

Sergio Traversa (CEO)

Thank you. In summary, we continue to firmly believe that we have an approvable drug in REL-1017, and we are excited by the potential of our novel Psilocybin derivative program. We look forward to reporting on further progress with our pipeline throughout the remainder of 2024. I do remain grateful to the Relmada team for their continued hard work and dedication to executing on our mission. Also, as always, 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 investigation on medicine through development. Thanks a lot to everyone for the attention and the interest, and looking forward to the next conference call.

Operator (participant)

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