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RELMADA THERAPEUTICS, INC. (RLMD)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 2023 was operationally focused with continued Phase 3 execution in MDD and expense discipline; net loss improved year over year to $25.2M ($0.84/share) from $37.9M ($1.28/share) on lower R&D, while G&A was slightly higher on compensation .
  • Management tightened trial quality controls (medical-record adjudication, real‑time site monitoring, capped site enrollment), pushing Reliance II to mid-2024 completion with top‑line in 2H 2024; Relight remains on track for year‑end 2024 enrollment completion .
  • Cash and short‑term investments were $96.3M at year‑end, with runway “into 2025,” covering readouts for Reliance II/Relight and a Phase 1 psilocybin trial .
  • Psilocybin program (REL‑P11) slated to start Phase 1 in 1H 2024 in obese patients, followed by Phase 2a with data expected 1H 2025—broadening optionality beyond MDD .
  • Street consensus (S&P Global) was unavailable at time of analysis; no revenue reported (pre‑revenue biotech), so EPS and cash burn vs. expectations could not be benchmarked (SPGI limit reached).

What Went Well and What Went Wrong

What Went Well

  • Meaningful YoY net loss improvement on lower R&D as Phase 3 study and OLS completions reduced spend: Q4 R&D $14.8M vs $26.9M YoY; net loss $25.2M vs $37.9M YoY .
  • Stronger trial quality controls likely to reduce placebo noise: “we now require medical records… screen failure rate… approximately 80% versus 50% previously,” and real‑time site monitoring with enrollment caps per site .
  • Clear catalysts and funding runway: “current cash on hand to take us into 2025” covering Reliance II/Relight and psilocybin Phase 1/2a .

What Went Wrong

  • No revenue; continued operating losses; G&A ticked up YoY in Q4 due to higher employee‑related costs (non‑cash stock comp was material) .
  • Reliance II timing clarity suggests top‑line now 2H 2024; while not a slip versus Q3’s “1H 2024” enrollment timing, investors must wait longer for a pivotal readout .
  • Estimates benchmarking unavailable (SPGI API limit), limiting external scorecarding this quarter; the company remains binary on clinical outcomes.

Financial Results

Quarterly P&L metrics and cash (oldest → newest):

MetricQ2 2023Q3 2023Q4 2023
Revenue ($USD Millions)$0.0 $0.0 $0.0
R&D Expense ($USD Millions)$13.74 $10.45 $14.80
G&A Expense ($USD Millions)$12.29 $12.24 $12.10
Net Loss ($USD Millions)$(25.30) $(22.00) $(25.20)
Diluted EPS ($)$(0.84) $(0.73) $(0.84)
Net Cash Used in Ops ($USD Millions)n/a$(11.6) $(10.3)
Cash + Short‑Term Investments (Period End) ($USD Millions)$118.5 $106.3 $96.3

Year-over-year comparison for Q4:

MetricQ4 2022Q4 2023
R&D Expense ($USD Millions)$26.9 $14.8
G&A Expense ($USD Millions)$11.8 $12.1
Net Loss ($USD Millions)$(37.9) $(25.2)
Diluted EPS ($)$(1.28) $(0.84)
Net Cash Used in Ops ($USD Millions)$(35.9) $(10.3)

KPI/Operational metrics:

KPIQ2 2023Q3 2023Q4 2023
Reliance II Enrollment Status>100 randomized; ~50 sites targeted Completion expected 1H 2024 “Passed half” by late 2023; complete mid‑2024
Screen Failure Raten/an/a~80% now vs ~50% previously (higher quality)
Site Quality ControlsProtocol amended; rater/site training Continuing controls Real‑time monitoring; cap per site; replace low‑quality sites

Notes: No segment reporting; no margin metrics applicable due to no revenue .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reliance II (Study 302) Enrollment Completion2024Complete in 1H 2024 Complete mid‑2024; top‑line in 2H 2024 Clarified timing; top‑line window added
Relight (Study 304) Enrollment Completion2024Complete in 2H 2024 Complete by year‑end 2024 Narrowed window to YE
Psilocybin (REL‑P11) Phase 1 Start2024Early 2024 1H 2024; Phase 2a to follow; PoC data 1H 2025 Maintained start; added PoC timing
Cash Runway2024–2025Through end of 2024 Into 2025 Extended runway

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2023, Q3 2023)Current Period (Q4 2023)Trend
Trial quality controls (adjudication, screening)Protocol amendments to reduce placebo; site/rater training; ~50 sites per study Medical-record adjudication; screen failures ~80% vs ~50% prior Strengthening quality, higher selectivity
Site monitoring and enrollment capsEmphasis on best MDD sites; efficient protocols Real‑time monitoring; pause/replace sites; limit per‑site impact Tighter operational oversight
Placebo response managementGoal to control placebo after high responses in 301/303 Explicit process to avoid mild/non‑legitimate patients Sustained focus
Statistical poweringPowering not disclosed; target clinically meaningful 2–2.5 MADRS points Similar commentary; plan for clinically meaningful delta; n≈300 Consistent
Regulatory postureFDA‑aligned designs for adjunctive MDD Apple‑to‑oranges vs. other MDD programs; designs remain standard Unchanged
Cash runwayRunway through 2024 Runway into 2025 Improved
Psilocybin program scopeIND/Phase 1 planning; MASLD data noted Phase 1 1H24 in obese patients; broader metabolic options Advancing to clinic

Management Commentary

  • “Enrollment in the ongoing Reliance II (study 302) is steadily proceeding, and we expect top line data in the second half of 2024… we plan to complete enrollment in [Relight] by year‑end 2024.” — CEO Sergio Traversa .
  • “Our screen failure rate in these studies is now approximately 80% versus 50% previously… we strongly believe that these changes will significantly enhance the probability of success.” — CEO .
  • “Based on our current projection, we expect the enrollment into Reliance II to be completed in mid‑2024… [and] with current cash on hand to take us into 2025.” — CEO .
  • “G&A… increase was primarily driven by an increase in compensation expense… [with] $8.1M… stock‑based compensation in the fourth quarter.” — CFO Maged Shenouda .
  • “We intend to initiate a single‑ascending dose Phase 1 trial in obese patients in the first half of this year… followed by a Phase 2a trial to establish clinical proof‑of‑concept.” — CEO .

Q&A Highlights

  • Impact of pre‑amendment patients: ~80–90 patients enrolled before changes will be included; management and advisor expressed confidence quality changes will carry the study despite inclusion .
  • Site strategy: Two problematic sites from prior study excluded; per‑site enrollment limited; real‑time monitoring for rating consistency, protocol adherence, and enrollment pacing .
  • Powering/assumptions: Targeting clinically meaningful 2–2.5 MADRS point separation with ~300 patients; statistical analysis plan to be finalized closer to completion .
  • Enrollment cadence and spend: Reliance II “passed half” by end‑2023; R&D expected to tick up into Q1/Q2 then sustain through Q3/Q4 as 302 and 304 progress .
  • Psilocybin scope: Indication decision deferred until clinical data; potential metabolic applications including obesity and fatty liver; non‑psychedelic dosing targeted .

Estimates Context

  • Consensus revenue/EPS estimates via S&P Global were unavailable at the time of analysis due to an SPGI API limit reached; we could not benchmark EPS or cash burn vs. Street. The company reported no product revenue and a net loss of $25.2M ($0.84/share) in Q4 2023 based on its furnished press release and financials .
  • Implication: In absence of Street benchmarks, investor focus remains on clinical execution milestones (Reliance II/Relight timing, quality controls) rather than quarterly P&L variance.

Key Takeaways for Investors

  • Quality over speed: Higher screen failure (~80%) and strict site oversight are designed to de‑risk placebo issues seen previously; expect enrollment to complete mid‑2024 with 2H 2024 top‑line for Reliance II .
  • Binary catalysts: Two Phase 3 readouts (Reliance II top‑line 2H 2024; Relight enrollment YE 2024) are primary stock drivers; psilocybin Phase 1/2a adds optionality in 2024–2025 .
  • Runway into 2025: $96.3M year‑end liquidity and stated runway “into 2025” fund key readouts without near‑term financing—reducing dilution risk pre‑data .
  • Expense trend supportive: YoY R&D down with trial progression; G&A elevated largely on non‑cash stock comp—cash burn improved YoY in Q4 .
  • Watch execution KPIs: Enrollment pace, per‑site performance, and any 302/304 operational updates (amendments, SAP finalization) will update probability‑of‑success perceptions .
  • Regulatory path: Adjunctive MDD design remains conventional; management emphasizes clinically meaningful MADRS delta target consistent with precedent .
  • Trading setup: Near‑term share action likely tied to interim operational updates; major repricing risk/reward around Reliance II 2H 2024 readout.

References: Q4/FY 2023 8‑K with press release ; Q4 2023 conference call (prepared remarks and Q&A) ; Q3 2023 8‑K with press release ; Q3 2023 call ; Q2 2023 8‑K with press release ; Q2 2023 call ; Jan 4, 2024 corporate update .