Relmada Therapeutics - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 delivered tighter cost control and a narrower loss: net loss of $18.6M and EPS of -$0.62; R&D fell to $11.0M and G&A to $8.1M, with operating cash burn of $8.8M versus $10.2M in Q4 2023.
• EPS beat Street: actual -$0.62 vs consensus -$0.70* (+$0.08, +11.4%); revenue remains $0 in line with consensus $0*; prior quarter Q3 was a miss (actual -$0.72 vs -$0.64*).
• Guidance improved: cash and short-term investments of ~$44.9M at 12/31/2024 with runway “into H1 2026,” up from prior “into 2025” (Q2/Q3).
• Strategic pivot: in-licensed NDV-01 (HG‑NMIBC) and sepranolone (Tourette/PWS); near-term catalysts include NDV‑01 Phase 2 topline at AUA (Apr 26–29, 2025) and planned FDA interactions; P11 (psilocybin) is being reevaluated due to competitive landscape.

What Went Well and What Went Wrong

What Went Well

• Cost discipline: R&D down to $11.0M (vs $14.7M YoY) and G&A down to $8.1M (vs $12.1M YoY); EPS improved to -$0.62 from -$0.84 YoY.
• Strategy/portfolio: acquired rights to NDV‑01 and sepranolone; “transform the Company through strategic product acquisition… exceptional value-creation opportunities” — CEO.
• Runway uplift: cash/short-term investments ~$44.9M and “adequate… into H1 2026,” providing flexibility to prosecute new programs — CFO.

What Went Wrong

• Pre‑revenue profile persists; operating loss remains high with net loss of $18.6M in Q4 2024.
• Program uncertainty: management is “reevaluating further development of P11” given crowded metabolic space and resource prioritization — CFO.
• Sequential variability: Q3 EPS missed consensus (-$0.72 vs -$0.64*) before rebounding in Q4; indicates sensitivity to quarterly expense cadence.

Transcript

Operator (participant)

Greetings and welcome to the Relmada Therapeutics Quarter Four, 2024 financial results call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Brian Ritchie. Thank you, Brian. You may begin.

Brian Ritchie (External Investor Relations Contact)

Good day, everyone, and thank you for joining us today. This afternoon, Relmada Therapeutics issued a press release providing a business update and outlining its financial results for the three months and year ended December 31st, 2024. 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 Therapeutics' 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, 2024, 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, March 27th, 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. With me on today's call are Relmada's CEO, Dr. Sergio Traversa, who will briefly provide a summary of recent business highlights, and Relmada's CFO, Maged Shenouda, who will provide a review of the company's Q4 financial results. After that, we will open the line for a brief Q&A session. Now, I will hand the call over to Sergio Traversa. Sergio?

Sergio Traversa (CEO)

Thank you, Brian. Good afternoon and welcome, everyone, to the Relmada fourth quarter and year-end 2024 conference call. Relmada is focused on three priorities: progressing our product pipeline, including NDV-01 and sepranolone, exploring product acquisition opportunities to maximize shareholder value, and maintaining careful resource prioritization. During today's call, I will spend a moment on our strategic product acquisition efforts and provide a pipeline update. After that, Maged will review our financial results. I will make a few closing remarks, and then we will take your questions. At the end of last year, we initiated a process to transform the company through strategic product acquisition efforts to maximize shareholder value. I am pleased to report that the process is going well.

We have always maintained an active surveillance to consider programs that have the potential to be high-value assets and meet our key target criteria of innovation, established proof of concept points, near-term value creation drivers, and the potential to address well-defined underserved markets. With the discontinuation of the Phase III studies of REL-1017 in major depressive disorder, we made the exploration of strategic product acquisition our primary focus. We have been following the progress of several programs, and our recent efforts identified an additional number of attractive opportunities. After in-depth reviews of several compelling candidates, we recently announced the acquisition of rights to two product candidates: NDV-01 in development for non-muscle-invasive bladder cancer and sepranolone for compulsion-related disorders.

While we maintain a deep understanding of diseases of the central nervous system as we evaluate strategic opportunities, the drug development expertise of our team provides flexibility to be opportunistic and consider innovative programs that meet our target criteria, regardless of the therapeutic area. Moving on to our product pipeline, I would like to provide a brief overview for NDV-01 and sepranolone and also provide an update on our plan for REL-P11. Let's start with NDV-01. On March 25th, we announced an exclusive licensing agreement with Trigone Pharma Ltd for NDV-01, a novel sustained-release intravesical chemotherapy for the treatment of high-grade non-muscle-invasive bladder cancer, NMIBC, and potentially other subtypes of bladder cancer. The program is currently in a Phase II study. We believe that NDV-01 is an excellent fit with our four key target criteria. Number one, innovation.

Trigone intravesical sustained-release formulation of gemcitabine and docetaxel could represent a true innovation in the care of high-grade non-muscle-invasive bladder cancer. Number two, proof of concept data. Previous studies support the efficacy of gemcitabine and docetaxel dosing in the treatment of NMIBC. Number three, near-term value drivers. We expect the top-line safety and efficacy data for NDV-01 to be reported at the American Urological Association meeting, AUA, that will be held on April 26th to 29th, 2025, in Las Vegas. Number four, the potential to address well-defined underserved markets. Sources indicate that there are about 75,000 new cases of bladder cancer diagnosed. About 50 of those cases have high-grade disease that has a high risk of recurrence. There is a very high recurrence rate for the 450,000 people in the U.S. that are living with bladder cancer.

NDV-01 currently evaluated in a Phase II single-arm study to assess safety and efficacy in patients with high-grade non-muscle-invasive bladder cancer. The study was designed to evaluate safety and efficacy in subjects with localized non-metastatic high-grade non-muscle-invasive bladder cancer. Top-line data from the first approximately 20 patients in the study are expected to be presented at the American Urological Association meeting in Las Vegas on April 26th to April 29th this year. Our goal is to bring NDV-01 to patients as soon as possible. With positive results, we believe that NDV-01 could become the treatment of choice for high-grade non-muscle-invasive bladder cancer, both as first-line therapy for new patients and salvage therapy for existing patients whose disease has progressed. Let's spend a moment on the treatment of high-grade non-muscle-invasive bladder cancer. Intravesical therapy is a mainstay of treatment intended to reduce the risk of recurrence following surgery.

Previously, the immunotherapy Bacillus Calmette-Guerin, BCG, was the cornerstone of treatment. However, significant supply constraints prompted the evaluation of intravesical chemotherapy. The medical community evaluated a number of chemotherapy agents, and published studies suggested that the use of intravesical gemcitabine and docetaxel, known as Gem/Doce, is to be the preferred combination with improved response rates and promising tolerability. Still, frequent Gem/Doce dosing is required, and the chemotherapy agents have a short bladder retention time, which limits the exposure to the chemotherapy. Together, this factor increased the risk of treatment failure and discontinuation and prompted the development of NDV-01. NDV-01 is administered in a simple two-step process in the urologist's office. It is designed for intravesical dosing and intended to be an in-office ready-to-use therapy that is administered rapidly within 10 minutes and requires no anesthesia or new or dedicated equipment to employ.

NDV-01 forms a spherical soft matrix within the bladder that sequesters drugs and releases it as the matrix gradually dissolves over a 10-day period. NDV-01 formulation is specifically designed to maximize local drug concentration and prolong exposure to Gem/Doce while minimizing systemic toxicity. Unlike conventional intravesical instillation, NDV-01 is designed to avoid peaks and troughs in drug concentration, ensuring a gradual and sustained release of Gem/Doce over a 10-day period. This approach may improve overall efficacy, reduce side effects, and reduce the frequency of dosing to improve patient compliance and outcomes. We believe that NDV-01 has the potential to improve on the published Gem/Doce results with less frequent dosing, ease of administration, and improved treatment compliance, which could lead to improved clinical outcomes in high-grade non-muscle-invasive bladder cancer. Our positive perspective is supported by primary field research with our care providers.

The next step includes presenting top-line Phase II results in four weeks, meeting with the FDA to align on a regulatory path to approval, completing the production of the next batch of material, and finalizing the design of registration studies intended to begin in late 2025 or early 2026. Moving on to sepranolone. On February 6, we acquired sepranolone as a potential therapy for Tourette syndrome and other compulsion-related conditions from Asarina Pharma. We believe that sepranolone is also an excellent fit with our four key target criteria. Number one, innovation. Sepranolone, or isoallopregnanolone, is a first-class compound from a new subgroup of neurosteroids known as GAMSAs, or GABAA modulating steroid antagonists. GAMSAs act selectively on the GABAA pathway to alleviate the symptoms or compulsive disorder. Number two, proof of concept data. Phase IIa results from Asarina signal improvement in Tourette syndrome, quality of life, and robust overall safety.

These data support sepranolone as a new potential first-line treatment option for Tourette syndrome and open the door to evaluation in other compulsion-related disorders. Number three, near-term value drivers. With promising Phase IIa data and safety information from more than 350 subjects, sepranolone is a Phase IIb ready program. Number four, the potential to address well-defined underserved markets. Tourette syndrome impacts more than 350,000 patients in the U.S. who have Tourette syndrome. Existing treatments include dopamine D2 blockers. Atypical antipsychotics are often limited by significant side effects. Stepping back for a moment, sepranolone is a neurosteroid and the first-in-class GAMSA, or GABAA modulating steroid antagonist, that acts by selectively inhibiting GABA neurotransmitter-induced allopregnanolone, a neurosteroid implicated in Tourette syndrome and other compulsive disorders.

Our evaluation of sepranolone has also included a review of other prominent compulsion-related disorders, and we identified Prader-Willi Syndrome, or PWS, as another potential indication, as it is often defined by persistent hunger and overeating, hyperphagia, that may have a strong compulsion-related element. The estimated global prevalence is approximately 350,000-400,000, and current treatment is focused on improving obsessive-compulsive behavior and other medical conditions. Sepranolone might be ideally suited for Prader-Willi Syndrome given its good overall tolerability and unique impact on compulsivity disorder, which could enable it to be incorporated into an existing comprehensive treatment regimen for Prader-Willi Syndrome. Next step includes meeting with the FDA to align on the regulatory path to approval, further development of the product supply plans, and finalizing the design of a Phase IIb study intended to begin late 2025 or early 2026.

Now, I would like to turn the call over to our CFO, Maged Shenouda, to talk about our portfolio prioritization efforts and financial results. Maged?

Maged Shenouda (CFO)

Thank you, Sergio. Portfolio prioritization and resource alignment are important elements of our strategic value creation process. As part of our prioritization, I want to provide an update on REL-P11, or P11, a novel low-dose modified-release formulation of psilocybin in development for the treatment of metabolic disorders such as obesity. We advanced P11 into a first-in-human study in Canada based on promising preclinical data showing that P11 improved metabolic parameters in animal models with no detrimental psychedelic-like side effects at doses tested. Results of the Phase I study indicate that REL-P11 is well tolerated. However, we are reevaluating further development of P11 given our emphasis on focused patient populations and the increasingly competitive clinical development landscape in metabolic disease.

While there has been a significant resurgence of effort to bring psychedelics into approved clinical use, we also recognize caution among regulators and clinicians that may complicate development. As a result of these factors, we are reevaluating our resources for P11 as we devote a substantial portion of our internal resources to the development of NDV-01 and sepranolone. Turning to our financial results. As noted by Brian this afternoon, we issued a press release announcing our business and financial results for the fourth quarter and year-end, and the year ended December 31, 2024. Full details are available in our press release and the 10-K filing we completed today. These documents are available on our website and the news and SEC filings tabs on our investor relations page.

As of December 31, 2024, Relmada had cash, cash equivalents, and short-term investments of approximately $44.9 million, compared to $96.3 million as of December 31, 2023. Cash used in operations in the fourth quarter ended December 31, 2024, was approximately $8.8 million, compared to $10.2 million for the same period in 2023. Looking ahead, we expect to devote a substantial portion of our internal resources to the development of NDV-01 and sepranolone. We will have a greater sense of our spend and cash runway following the planned FDA interactions intended to be completed later this year. Moving through our fourth quarter 2024 financial results. Research and development expenses for the fourth quarter 2024 totaled $11 million, compared to $14.7 million for the fourth quarter 2023, a decrease of $3.7 million.

The decrease was primarily driven by a decrease in study costs associated with the completion of clinical trials for REL-1017 for major depressive disorder. General and administrative expenses for the fourth quarter of 2024 totaled $8.1 million, compared to $12.1 million for the fourth quarter of 2023, a decrease of approximately $4 million. The decrease was primarily driven by a decrease in stock-based compensation expense. Net cash used in operating activities for the fourth quarter of 2024 totaled $8.8 million, compared to $10.2 million for the fourth quarter of 2023. The net loss for the fourth quarter of 2024 was $18.6 million, or $0.62 per basic and diluted share, compared with a net loss of $25.1 million, or $0.84 per basic and diluted share for the fourth quarter of 2023.

Before we open the call for questions, I'll turn the call back to Sergio for some closing comments. Sergio?

Sergio Traversa (CEO)

Thank you, Maged. I would like to leave you with these key messages from today's call. Relmada is focused on three priorities: exploring strategic product acquisition to maximize shareholder value, progressing our product pipeline, and maintaining careful resource allocation. Our evaluation of strategic product opportunities is focused on key target criteria: innovation, proof of concept data, near-term value creation drivers, and potential to address underserved markets with flexibility to be opportunistic, given our drug development expertise. Our plans for each program center around interacting with the FDA to align on regulatory strategy, complete production of the next batches of material, and finalize the design of the next studies, expected to begin again around year-end this year or early 2026.

For NDV-01 in development for high-grade non-muscle-invasive bladder cancer, we expect initial proof of concept data to be reported at the American Urological Association meeting, AUA, held on April 26, 2025, in Las Vegas. Our next study is expected to be a registration trial. For sepranolone, our next study is expected to be a signal-finding study in Prader-Willi Syndrome and a Phase IIb study in Tourette syndrome. In closing, as we prepare to advance our two clinical programs, we want to thank our investors for support and for taking time to join today's call. We look forward to updating you on our progress throughout the year. Operator, I would like now to open the call for questions. Thank you.

Operator (participant)

Thank you. We'll now be conducting a question-and-answer session.

If you'd like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate that you are in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull for questions. Our first question comes from Uy Ear with Mizuho Securities. Please proceed with your question.

Uy Ear (Analyst)

Hey, guys. Thanks for taking our question. First, congratulations on the two deals. A question that we've been getting is maybe just help us understand the process that was involved in the deal, why were there other competitive bidders, particularly for NDV-01, and why these companies chose to go with you if there are other bidders over the other bidders. That's the first question.

I guess the second question we have is, at the upcoming AUA meeting, what should we kind of expect in terms of potential data? I think the abstract will be out on April 11 or something. Will there be data in the abstract, or sort of the key data will be at the conference? Thanks.

Sergio Traversa (CEO)

Thank you, Uy. Thanks for the question. I'll start with the first one. Why partners decided to come with Relmada instead of other companies? The first acquisition of sepranolone was a little bit more simple and was a straight acquisition of an asset that we knew we have known for a long time. To be very direct, that acquisition was planned in advance, regardless of what the outcome of REL-1017 would have been. There has been a long time in our rather screen.

We've been talking with Asarina. That was a little bit more simple. NDV-01, it was a lot more competitive. The reasons, we should ask Trigone the real reason or the specific reason they decided to come with us. Our impression, what we can offer and we can put on the table is clearly a strong development capability. We have done four Phase II trials, probably 10 Phase I, additional Phase II, abuse deterrence studies. We do have quite a bit of expertise that can be applied to other therapeutic categories, and that clearly has a value. The infrastructure is intact. That was clearly one component. The other components are a little bit softer and more customized to the relation we have with Trigone. It also has been a long-term relation.

NDV-01 is one of the two products that Relmada has now. Clearly, we'll put a lot of focus on these two products. There is no risk that NDV-01 will be one of the 10-20 products in development that larger companies have. Focus on the program is clearly one of the reasons. The second one is that when we do these kinds of transactions for both companies, Asarina and Trigone, we work together. Both management of Asarina and Trigone work very close with us. It's really a partnership. We do not want to lose the know-how and the expertise of people that have been working on these plans and this program for years and years.

I mean, being part of the program, being part of the team that will try to bring this product to the market together with the focus and the development capability made Relmada the company of choice, at least for Asarina and for. Yes you can.

Maged Shenouda (CFO)

Can I add one thing? The other, I think, important factor is now Trigone or Trigone shareholders are also shareholders of Relmada and will participate significantly in the upside related to NDV-01.

Sergio Traversa (CEO)

Thank you, Maged. I hope we answered your answer, the first question. The second one. Yeah, the second one, I have to be a little bit more cautious because in the abstract, there's not going to be any particular data. Reason being that the data will be collected in real time, and so they will be ready to be presented when they will be available.

This is right before the AUA conference. They will not be ready to be included in the abstract because the patients are still in treatment and they are still being evaluated. In terms of expectations, look, it is a very competitive market. There are several products in development for the treatment of bladder cancer. We do have the data published available on the combination Gem/Doce, used as an immediate release that has been used for years and extensively used by urologists. That would be the starting point. We do expect the data to be at least as good as what is the immediate release formulation as of today, and the data are available and published in the literature.

You find different numbers, but the kind of rule of thumb that we heard from urologists is that when you have a complete response at month three or four, somewhere in the range of 75%, you definitely are in the competition. This is a good number, right? This is just based on historical and from urologists. We'll see what NDV-01 will deliver.

Uy Ear (Analyst)

Is the expected data, is that primarily from the three months of induction and any particular?

Maged Shenouda (CFO)

Yeah, maybe I can step in here. We want to be respectful of the meeting. We want to be respectful of whatever restrictions there are about data release. Just to be mindful of that, we'd rather not delve into the expected data release. We'll learn a lot more when the abstracts are presented and then when the data are released.

Uy Ear (Analyst)

Thank you.

Maged Shenouda (CFO)

Sure.

Sergio Traversa (CEO)

Few more weeks of patience, Uy.

Uy Ear (Analyst)

Okay. All right.

Operator (participant)

Thank you. Our next question comes from Marc Goodman with Leerink Partners. Please proceed with your question.

Basma Radwan (Analyst)

Hi, good afternoon. This is Basma on for Mark. Our first question, could you please elaborate a little bit on the safety profile of sepranolone? Also, we have a question on the second indication, which is Prader-Willi. Now, given that the space is a little bit crowded after the recent approval of the first agent in this indication, do you think that it's going to be a valuable second opportunity for the drug? That's it. Thank you.

Sergio Traversa (CEO)

Thanks for the questions. The safety profile of sepranolone, we know it very well. It's very well known. There are safety data on over 350 patients.

The only side effect that was more frequent, we are still talking about low single digit, was a subcu injection. It was injection site redness and some irritation, temporary. That was it. That can be read as an extremely well-tolerated drug. On the second question, the Prader-Willi, the answer is yes. There is definitely space for other products. We are very happy about the approval that we have seen yesterday because it means that the FDA and the Patients Association and the outside world want and need new drugs for the treatment of this pretty terrible syndrome, the Prader-Willi. In terms of the space for sepranolone, sepranolone acts on the GABAA and it acts on the compulsatory component that is very different from what the other products are working on.

I would not only say that there is space. I would say that there is some complementary, at least based on the mechanism of action. There is some complementarity between sepranolone and what is available and what potentially will become available. I hope I answered your question.

Basma Radwan (Analyst)

Yep. Thank you. That's very helpful.

Operator (participant)

Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. That is star one. Our next question comes from Andrew Tsai with Jefferies. Please proceed with your question.

Andrew Tsai (Analyst)

Hey, congrats on in-licensing these compounds. Pretty cool. Maybe for sepranolone, what is the approvable endpoint for pivotal studies? What did you see in the Phase IIa on that endpoint? How would that compare to the dopamine blockers and antipsychotics used for Tourette's?

Sergio Traversa (CEO)

Thanks, Andrew. Great hearing from you.

Thank you for the question. Let me be sure that I understand what the endpoints are. For Prader-Willi, the endpoints, the FDA knows the path very well. You have seen the approval yesterday. We do believe that it is pretty much the endpoint that would define the process of the regulatory process. We have not spoken with the FDA yet. I am just trying to deduct, to use the logic, and to try to learn from what is happening out there. For Tourette syndrome, usually the endpoints, there is a scale, a Yale scale. That is the usual endpoint and measures the number of tics. Based on the mechanism of action, we will try to incorporate in the endpoints also the compulsive aspect of Tourette syndrome. You may know that about 40% of patients with Tourette, they also are affected by obsessive-compulsive components.

We may probably have to use the scale, but we may also try to focus on what the drug does best, that is controlling compulsive behavior.

Andrew Tsai (Analyst)

Okay. For the bladder cancer compound, after you report the data at the medical conference, does it make sense in your upcoming FDA meeting to discuss whether an accelerated approval pathway is possible?

Sergio Traversa (CEO)

Not right after the data, but probably after we will discuss with the FDA what the path for approval is. If you look at how other drugs have been developed or are in development and the drugs that have been approved, and also considering that Gem/Doce, the combination of gemcitabine and docetaxel, has been widely used over the last 10 years by urologists, we have some hope.

We have a good hope at the other companies that the FDA will require only one study, open label with no placebo. That's what we have seen. We will talk with the FDA, and then we will update you on what the regulatory process for NDV-01 is. It's a little bit too early to make big statements.

Andrew Tsai (Analyst)

My last question is, can we expect you to in-license more compounds this year?

Sergio Traversa (CEO)

We always keep our eyes open. We have done a lot of evaluations. There is a lot of product available for in-licensing. There are great ideas. There are small companies, private, that have issues in the capability of developing or doing Phase II and the availability of financing. As a public company with development capability, I would say that other potential licensors come to us.

As of now, we do not know if we will do anything anytime soon. We clearly keep our eyes open. Our goal is to build the pipeline. We have two products now and try to bring in any assets, any development program that fit in our strategy. I have to be vague because there is nothing that will happen this week or next week. In the future, you never know. We keep an eye on everything. We will only do, we are selective, right? We do not want to in-license something just to license something. We want to have something that has potential and it fits our development criteria that I discussed during the call.

Andrew Tsai (Analyst)

Right. Very good. Look forward to more updates. Thanks.

Sergio Traversa (CEO)

Thank you, Andrew.

Maged Shenouda (CFO)

Thank you, Andrew.

Operator (participant)

Thank you. With that, there are no further questions at this time. I'd like to turn the floor back to Sergio Traversa for closing remarks.

Sergio Traversa (CEO)

Thank you very much. We can end the call, but I would like to end it with a big thank you for the support and for the people that have believed and believe in the company and in us, that we can develop products and we can bring to the market help for patients and return for investors. Thank you very much.

Operator (participant)

Thank you. With that, that does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.