Relmada Therapeutics, Inc. (NASDAQ:RLMD) Q1 2024 Earnings Call Transcript

Relmada Therapeutics, Inc. (NASDAQ:RLMD) Q1 2024 Earnings Call Transcript May 10, 2024

Relmada Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

LifeSci Advisors: Sergio Traversa – Chief Executive Officer Maged Shenouda – Chief Financial Officer Andrew Cutler – Senior Clinical Development Advisor

Operator: 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 a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Wednesday, May 8, 2024.

LifeSci Advisors:

Tim McCarthy: 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 31, 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 December 31, 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 8, 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: 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 revision to Reliance II, the ongoing study 302, which is a Phase 3, two-arm, placebo-controlled pivotal study evaluating REL-1017 25 mg 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 continue to play a critical role. Moreover, the ongoing initiative we put in place to drive trial awareness with prospective patients are 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 and dose 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 weeks 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 revision 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 trial 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 two 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 the Phase 2A trial to establish clinical proof-of-concept. Data from the plan and to a study is anticipated in the first half of 2025. These blended 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 these 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 i clinical trial for our modified release formulation of 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?

Maged Shenouda: Thank you, Sergio. Today we issued a press release announcing our business and financial results for the three months ended March 31, 2024, which I will now review. For the first quarter ended 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 ended 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. A non-cash charge related to stock-based compensation for G&A totaled $6.6 million in the most recently completed first quarter. For the first quarter ended 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 had 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?

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Q&A Session

Operator: Thank you. [Operator Instructions] Your first question comes from Marc Goodman from Leerink Partners. Marc, please go ahead.

Basma Radwan: Hi, this is Basma on for Marc. I had a question about the ongoing Reliance and Relight trials. You actually mentioned something that you were monitoring the trial, 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 a larger placebo response, do you see any similarities and differences too, give us some color about the strategy that you implemented to reduce the placebo response? Thank you.

Sergio Traversa: Yes, sure. And thanks for the question. I’ll give you like the top down answer and then we have Dr. Andrew Cutler, who is our clinical advisor on the call, will provide a little bit more details about this aspect? Well, first, let me let me say something about the blinded data. There is absolutely no way to get from the blinded data the outcome of a clinical trial and we are seeing is that in the last in the last two trials that we had. So the help that we can get or everybody can get from monitoring the blinded data is only an exclusively to see there is something that it’s not like, that doesn’t make and I can’t find the right word, but that is not consistent. I’ll give an 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, that can be the patient or can be the site, but usually a patient that response is consistent over four weeks and if he doesn’t respond to stay 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 these zigzag patterns get into the trial. When he’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: Yes, I absolutely agree with what Sergio said. What you look for is consistency and quality indicators. And in addition to what you said about the primary, the MADRS zigzag, and you also look for consistency across different scales. So the primary secondary — 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 the sites we’re 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 overenrolled 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: Thank you, Andy, and I hope that answered your question.

Basma Radwan: Thank you.

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

Andrea Tan: Hi, Sergio, thanks so much for taking the question and 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 one follow-up question. Thank you.

Sergio Traversa: Yes, and 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. But in general, for first, you contact the site and you discuss like any detail regarding patients or patients that has some inconsistency and then now you go through the whole process. And ultimately, if that becomes a pattern, you don’t want to have like a side that shows inconsistency enrolling like 10 to 20 patients because that would affect the whole trial. So the ultimate measure is to close the site. But Andy, I’m sure can give you a little bit more color on this.

Andrew Cutler: Yes, 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 one site has too many patients, one or two 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 to close down some sites that have quality issues and so ultimately what you do is you just stop them from enrolling so that they don’t have a chance to hurt the study.

Andrea Tan: Okay. And I guess can you just remind us quickly if you’re — are you planning on having an interim analysis or is there going to be any type of mechanism in place for the DSMB to recommend stopping the study early as they have in your prior trial?