Relmada Therapeutics - Q2 2024

Transcript

Operator (participant)

Good afternoon. Welcome to the Relmada Therapeutics, Inc. Second Quarter 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will 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, 7 August 2024. I would now like to turn the conference over to Tim McCarthy, LifeSci Advisors. Please go ahead, sir.

Tim McCarthy (Managing Director and Relationship Manager)

Thank you, Operator, and thank you all for joining us this afternoon. With me on today's call are Dr. Sergio Traversa, Chief Executive Officer, and Maged Shenouda, Chief Financial Officer. This afternoon, Relmada issued a press release providing a business update announcing financial results for the quarter ended 30 June 2024. 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 31 December 2023, and with subsequent filings, including the second quarter 2024 10-Q filed after the close today.

This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast on 7 August 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?

Sergio Traversa (CEO)

Thank you, Tim, and thanks to everyone for taking time to join us this afternoon. Relmada is dedicated to the development of transformative medicine for people living with central nervous system disorder, and I'm pleased to report that Relmada's clinical program has made meaningful progress over the last five months. We believe that the portfolio led by the Phase III program for REL-1017 as a potential adjunctive treatment for major depressive disorder, or MDD, is poised to reach several important milestones, and we are encouraged by the company's progress.

As a quick reminder, REL-1017 is a small molecule that preferentially blocks a hyperactive brain channel called NMDA receptor that is associated with MDD. REL-1017 has been designed to rapidly improve symptoms and provide these patients with new treatment options on top of their current regimen.

Completing the Phase III program for REL-1017 is Relmada's number one objective, and it will complete the study package required to file the NDA. During today's call, we will discuss the planned interim analysis by year-end 2024 for the Reliance II study, review the timeline to complete enrollment in the two Phase III studies in the REL-1017 program, outline time to initiate a Phase I study for our proprietary psilocybin program, REL-P11, in development for metabolic diseases.

And comment on our cash balance, which we expect to support our planned operations into 2025 and several key clinical milestones, especially for the REL-1017 program. I'll briefly review our program, and in a few minutes, Maged, we'll provide you with a summary of our second quarter financials. After that, I will make a few closing remarks, and then we will open the call for your questions.

Starting with REL-1017, we are enrolling two pivotal Phase III studies for REL-1017, Reliance II and RELIGHT. These studies build on positive Phase II data with REL-1017 for the adjunctive treatment of depression. Our clinical dataset also demonstrated that REL-1017 is well tolerated with no indication of abuse potential. Our ongoing Phase III studies are designed to assess the impact of REL-1017 on the MADRS score as an indicator of depression severity. The studies are evaluating REL-1017 in patients with documented clinical depression undergoing treatment with an approved antidepressant.

Each of the ongoing studies, Reliance II and RELIGHT, is enrolling up to 340 subjects. The studies are randomized 1:1 and designed and powered to detect 2, 2.5 points delta in the MADRS score at day 28. The protocols have been thoughtfully designed to incorporate several elements intended to de-risk each study with the thorough patient adjudication process.

As a snapshot, the features that we have emphasized in the Reliance II and RELIGHT studies are focused on optimizing the protocol, carefully selecting study sites, and monitoring the number of patients per site, and most importantly, carefully verifying the diagnosis of depression and each patient's medical history to ensure enrollment of patients with clinical depression. We have been especially focused on defining the patient enrollment criteria with extra care. The current protocols include a review of medical and pharmacy records.

The studies also require that patients have been treated with an approved antidepressant for at least six weeks and have experienced an improvement of less than 50% since starting treatment. Adoption of these elements has increased our confidence that we are appropriately enrolling the most suitable patients into Reliance II and RELIGHT.

As a result of these efforts, changes in the screen failure rate can be considered one way to assess the stringency of the enhanced enrollment criteria. As of today, we are observing approximately 80% screen failure rate versus a 50% screen failure in the Reliance I study. We intend to reach two important milestones by the end of the year, reporting the output of a pre-planned interim analysis and completion of enrollment of Reliance II. We expect completion of enrollment in RELIGHT to follow approximately six months after that.

The pre-planned interim analysis of Reliance II study is intended to be a de-risking tool to increase the probability of a successful study outcome. The analysis will include a futility analysis and a sample size re-estimation, if necessary, with the potential to adjust the sample size to ensure proper statistical power.

There are three potential outcomes from the interim analysis: the study is futile, the study can continue with the addition of a certain number of patients, and the study can continue with the pre-planned number of patients, that, of course, is what would be our preferred outcome. We will conduct the interim analysis and expect to report the outcome of this analysis before year-end 2024. Now I would like to spend a few moments on REL-P11. We identified the metabolic activity of REL-P11 as part of our preclinical evaluation on its potential effect on neurodegenerative disease.

As a quick reminder, REL-P11 is a low-dose modified release formulation of psilocybin. Compelling data from a recognized preclinical rodent model of metabolic dysfunction-associated steatotic liver disease, or MASLD, published last year in November at the American Association for the Study of Liver Diseases, is the cornerstone of our program.

These data show that REL-P11 has a benefit on multiple metabolic parameters, including triglyceride levels and glucose metabolism. Besides reducing steatosis of the liver, REL-P11 reduces blood glucose and body weight without producing any side effect on the CNS. These data led to our evaluation of REL-P11 as a candidate for the treatment of metabolic disorders such as obesity. We plan to initiate a Phase I single ascending dose, or SAD, study in obese subjects for REL-P11 shortly.

The Phase I study will define the pharmacokinetic safety and tolerability profile for REL-P11 and allow us to select a dose for evaluation in the Phase IIa proof-of-concept study. We expect to complete the Phase I SAD study and initiate the Phase IIa study in H1, first half of 2025. Now I would like to turn the call over to our Chief Financial Officer, Maged Shenouda, to review our recent financial results. Maged?

Maged Shenouda (CFO)

Thank you, Sergio. This afternoon, we issued a press release announcing our business and financial results for the three and six months ended 30 June 2024. During today's call, I will provide a brief overview of the three-month financial results. Full details are available in our press release and 10-Q filing on our website located in the News and SEC Filings tabs of the Investor Relations page. Research and development expense for the three months ended 30 June 2024, were approximately $10.7 million, compared to $13.7 million for the same period in 2023, a decrease of $3 million.

The decrease was primarily driven by a decrease in study costs associated with the completion of two Phase III trials and the long-term open-label safety Reliance III trial, or Study 310. General and administrative expense for the three months ended 30 June 2024, were approximately $8.1 million, compared to $12.3 million for the same period in 2023, a decrease of approximately $4.2 million. The decrease was primarily driven by a decrease in stock-based compensation expense.

The net loss for the three months ended 30 June 2024, was $17.8 million, or $0.59 per basic and diluted share, compared with a net loss of $25.3 million, or $0.84 per basic and diluted share for the same period in 2023. I will also note that the company had 30.17 million common shares outstanding as of 2 August 2024. As of 30 June 2024, Relmada had cash, cash equivalents, and short-term investments of approximately $70.4 million, compared to $96.3 million as of 31 December 2023. Cash use in operations for the second quarter was $13.3 million.

Based on our current clinical development plans, we believe our current cash position is adequate to support operations into 2025 through key milestones, including the top-line data from the Reliance II study. Before we go to your questions, I'll turn back to Sergio to make a few closing comments. Sergio?

Sergio Traversa (CEO)

Thank you, Maged. As we conclude the prepared remarks on this afternoon's call, I would like to leave you with a few key messages. Our two Phase III studies for our lead program, REL-1017 for MDD, have been thoughtfully designed and are being carried out with appropriately adjudicated patients with potentially de-risked studies.

We expect two important milestones from the Reliance II study before the end of the year, with the output of a pre-planned interim analysis, which includes both a futility analysis and a sample size re-estimation if necessary, and the completion of enrollment of the Reliance II study. We expect completion of enrollment of RELIGHT to follow approximately six months after that. Preparations on track to begin the clinical program for REL-P11, our proprietary psilocybin formulation for metabolic disorders, later this quarter or early next quarter.

We believe our financial resources will support our planned operation into 2025 through key milestones, including top-line data from the Reliance II study. At this point, Operator, we can open the call for questions. Hello, Operator, you there?

Operator (participant)

Apologies. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star followed by the number one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press a star followed by the number two. One moment, please, for your first question. Your first question comes from the line of Marc Goodman with Leerink Partners. Please go ahead.

Marc Goodman (Senior Managing Director)

Thanks for taking my question. This is Rudy on the line for Marc. Can you remind us the baseline MADRS score in ongoing Reliance II study and how that compares with the Phase II adjunctive MDD trial and the Phase III Reliance I study? Thanks.

Sergio Traversa (CEO)

Well, thank you for the question. And so the baseline MADRS average when the patients' population starts, they are very similar. It's right in the mid-30s, like 33-34 range for all the studies. That's pretty typical for depression studies.

Marc Goodman (Senior Managing Director)

Got it.

Sergio Traversa (CEO)

Hope that answers your question.

Marc Goodman (Senior Managing Director)

Yes. Just a quick follow-up. What gives you the confidence that we'll finish enrollment six months after Reliance II, and would a potential sample size re-estimation impact the timeline for that trial?

Sergio Traversa (CEO)

Yeah. Well, the confidence that when Reliance II will be over, and if successful, as we hope, then all the resources will be put on RELIGHT. So, we have close to 100 sites that will be available, of course, and we may not enroll all of them. So, the full resource is dedicated to the studies. And so, we do have confidence that based on the enrollment rates that we are seeing now, we can finish in about six months. And sorry, the second question was how we're confident about the timelines for the sample size re-estimation?

Marc Goodman (Senior Managing Director)

No. I was asking whether the sample size re-estimation will impact the timeline for the second trial.

Sergio Traversa (CEO)

That's a good question. Well, we will address it when we know how many patients we have to enroll, but it could, but it's probably not going to be very material. When we are talking about sample size re-estimation, we are not talking about adding like 200 patients to the study. That would be probably a problem in general. And so sample size re-estimation will evaluate how many if and how many patients we'll have to enroll.

Marc Goodman (Senior Managing Director)

Got it.

Sergio Traversa (CEO)

The answer to your question is that it may, but it's not going to be a material timeline change.

Marc Goodman (Senior Managing Director)

Very helpful.

Operator (participant)

Your next question comes from the line of Andrew Tsai with Jefferies. Please go ahead. Andrew, you might be on mute. Andrew Tsai?

Andrew Tsai (Managing Director)

Hi. Can you hear me?

Sergio Traversa (CEO)

Yes. Now, yes.

Andrew Tsai (Managing Director)

Yes. Oh, hi. Thanks for taking my question. So on clinical trials, we noticed there are some changes to the estimate patient enrollment, estimated patient enrollment number to 340. And I think you mentioned it in the prepared remarks. So can you talk about why that number changed from 300 to 340?

Sergio Traversa (CEO)

Yeah, sure. Good afternoon, Andrew. Well, ClinicalTrials.gov is more a general indication that is made mostly for the FDA, and it's an indication, right? The patient population would be up to 340. That doesn't mean that we will go to 340. You don't want to change the update ClinicalTrials.gov too frequently. And so you put some guidelines that you expect to be meeting. And also, you have to depend if you include dropouts and non-dropouts. But the number of patients is up to 340. That doesn't mean that we have to go to 340, assuming no sample re-estimation.

So, I will not take that as the final number. The final number will be determined by the statistical plan that we have not finalized. You usually send to the FDA the statistical plan as close to the end as possible because there is no upside in defining numbers before. Depends on the enrollment rates and various parameters. I hope I answered your question. I don't take the 340 as the final absolute number. It's up to 340.

Andrew Tsai (Managing Director)

Got it. Yep. Very helpful. It sounds like there's a futility analysis in the interim now. Did you have to change the protocol or the stats plan, and are you taking any statistical penalty with the futility option?

Sergio Traversa (CEO)

Well, thanks, Andrew, for asking the question because it's very important. We did spend the last, I would say, couple of months to work on the statistical plan. I'll tell you why. Because when we had in the study 301, we had an interim review. What we got from the data monitoring committee was, "Stop the trial as early as possible." We had absolutely no indication of what was the reason for that. Could have been futility or could have been efficacy. That one didn't really help Relmada because we stopped it as indicated at the earliest. There was like 227 patients. The results were not the one we were expecting.

If we would have gone to the 300-plus that was the plan, maybe the study, based on the numbers, could have been statistically significant, especially because the second part of the trial was conducted when the COVID restrictions were lifted. You may remember that the results of the last 63 patients enrolled in 301 were actually very, very good compared to the previous 165 patients. That interim analysis was not only not very helpful, it actually created a little bit of a problem. This time, we don't want to end up in the same situation.

We have been very carefully planning the interim analysis. Within the boundary of what can be done, of course, we want to get some information that can help to de-risk the program. We inserted the futility analysis.

So at least we want to know - we hope not, but we want to know - if the study is futile, then we may decide, if it is not the case, to continue to preserve the cash that we already have. It is significant, the cash that we have already in our hands. And then there is a second scenario that is sample size re-estimation.

The DMC will give us an indication of how many patients we should add to get to a likely P-value. Then there is the third scenario that is the one that is the most - the one that everybody likes the most - that will tell us that we can stop the trial at the planned number of patients that would be around 300-310, or whatever is the final number that will be defined in the statistical analysis and statistical plan.

We will know if that would be what the DMC will tell us. We will know that the study is not futile because if it is futile, we will be informed. Then we don't have to add any patients to get to a potential P-value. There's no guarantee then the study was successful because we may have some more patients to add that they are not incorporated in the statistical analysis at the interim, but clearly would give some good sense that we are on the right direction. The last of your question was the statistical penalty.

No, there is no alpha penalty in the futility analysis because there is no analysis on the efficacy, and there is no early stop. You don't pay any alpha penalty. I hope I was a long answer, but I wanted to be very clear and specific on this.

Andrew Tsai (Managing Director)

Yep. Thank you. And very last one is, what would be the threshold for futility if the placebo-adjusted delta is below a certain point on MADRS, or do you have any color on that?

Sergio Traversa (CEO)

Yeah. That's a more difficult to answer, not because we don't want to, but we haven't finished or finalized the analysis. Then we get into the heavy, complicated statistics. But in general, we will set the futility close to what can be a non-clinically meaningful threshold, right? If the study would not have a chance to reach any clinically meaningful results, then probably would not be worth to continue. But we haven't finalized what the numbers will be.

Andrew Tsai (Managing Director)

Thank you again. Very clear.

Sergio Traversa (CEO)

Thank you, Andrew.

Operator (participant)

Your next question comes from the line of Andrea Tan with Goldman Sachs. Please go ahead.

Andrea Tan (Analyst)

Good afternoon. Thanks for taking the question. Sir, just really quickly, could you remind us the extent of the trial that you expect to be completed ahead of the interim analysis? And following that, how soon after that could we expect to see the top-line data?

Sergio Traversa (CEO)

Let me be sure I understand. Hi, Andrea. Good afternoon. Let me be sure I understand your question. We do have another trial before the interim analysis. No, the only two trials that are ongoing for REL-1017 are Reliance II and RELIGHT. Everything else has been completed. Long-term safety, they're all done.

Andrea Tan (Analyst)

Oh, no. I'm so sorry. I'm so sorry. I was just asking, in terms of the interim analysis that's being conducted or planned for Reliance II, I guess maybe what proportion of that study is it? I think you may have mentioned in the past that it's around 80% to 90% of the trial, at which point the interim analysis will take place.

Sergio Traversa (CEO)

I gotcha. Yeah, I got it again. Yeah. Sorry. I misunderstood. Theoretically, the latest you do it, the better. Now, there is the incremental benefit that you get it going, let's say, at 70 or 75, 80% becomes smaller and smaller. So we'll try to do it as late as possible, but we also want to know. And so it is going to be before your end, right, over the next, it's August or the next, I would say, three, four months. It takes a couple of months to prepare it. And so we are pretty close. We are pretty close.

Andrea Tan (Analyst)

Okay. And if the DMC advises that you could continue without additional patients being enrolled, maybe what is the expected timeframe over which we could then expect the top-line data?

Sergio Traversa (CEO)

Well, it depends on how many patients we'll have to enroll, but it's not going to be that far away. I don't have the exact number, but we are planning to finish enrollment by year-end. You can imagine that it can be by year-end or sometime early 2025, but not too long after. If they tell us that we don't need to enroll any more patients, as we hope, it's going to be pretty short after that.

Andrea Tan (Analyst)

Okay. And then one quick question on the psilocybin study. Just curious if you could speak to the decision to run that study in Canada and if that reflects any regulatory hurdles in the U.S. or maybe even a variation in how the different agencies view psilocybin.

Sergio Traversa (CEO)

Yeah. Yeah. Well, we do it in Canada for two main reasons, right? One is that Canada, for some reason, they have very good structure for Phase I. Just to give you an example, REL-1017, Phase I was done in Toronto, in Canada, because they have very good facilities. The second one is that the Canadian agency, it is very used to psychedelic and is used to more than the FDA. So the regulatory hurdles are easier in Canada than in the U.S. So the combination of these two reasons made us do it in Canada, nothing else really.

Andrea Tan (Analyst)

Got it. Okay. Thank you so much.

Sergio Traversa (CEO)

Thank you, Andrea.

Operator (participant)

Your next question comes from the line of Uy Ear with Mizuho Financial Group. Please go ahead.

Speaker 7

Hi. Thanks for taking my question. This is Charles on for Uy. I guess I had a question on the re-estimation analysis. Just, I guess, kind of dig into how many more patients you might add potentially in this analysis. Is that kind of a preset number, or will they give you that number? And then also on the runway guidance, is the runway still expected to read out for RELIGHT as well? Thank you.

Sergio Traversa (CEO)

Thank you, Charles. I will, Maged, answer the second question, but the first one is the number will be recommended by the DMC. And so it can be anywhere, right? Clearly, if the target number is somewhere north of 300 and we don't expect to double that number of patients or to add 200 patients, then there would be an indication that the signal may not be that strong. So it would be a reasonable amount of patients that is also feasible in a reasonable amount of time.

Maged Shenouda (CFO)

Yeah. And Charles, thank you for the question. I'll take the finances question. I don't think we want to get that specific with regard to the readout from the RELIGHT study. What we have said is it will take us into 2025, certainly with data from the Reliance II study. And then a lot depends on enrollment patterns, and that's developing day by day. So I can't be that specific at this point.

Speaker 7

Okay. Thank you for taking my question.

Sergio Traversa (CEO)

Apparently, there aren't any more questions. Doesn't seem that there are any more questions. Well, I assume there are no more questions pending. And so if we are not showing any more questions, I can go to the closing remarks. Well, thank...

Operator (participant)

Yes,... Apologies. We don't have any questions at this moment. You can now proceed with your closing remarks.

Sergio Traversa (CEO)

Okay. Well, thanks a lot. And so thank you, everyone, for joining us for the Relmada Second Quarter 2024 conference call today. We believe we are poised to achieve several important milestones that could represent an inflection point for Relmada. We look forward to updating you on our progress, and thank you for joining us for this second quarter business update call. Have a great night.

Operator (participant)

Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.