Relmada Therapeutics, Inc. (NASDAQ:RLMD) Q1 2024 Earnings Conference Call May 8, 2024 4:30 PM ET
Company Participants
Tim McCarthy – IR, LifeSci Advisors
Sergio Traversa – Chief Executive Officer
Maged Shenouda – Chief Financial Officer
Andrew Cutler – Senior Clinical Development Advisor
Conference Call Participants
Basma Radwan – Leerink Partners
Andrea Tan – Goldman Sachs
Andrew Tsai – Jefferies
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.
I would now like to turn the conference over to Tim McCarthy, LifeSci Advisors. Please go ahead.
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?
Question-and-Answer 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?
Sergio Traversa
So we will have, not we but the data monitoring committee will have a look at the data at some point close or be very close to the end, but this is not an interim analysis because there is no statistical penalty. It’s a simple re-estimation. They will let us know if the sample that we have in the trial is enough to reach statistical significance or if we have to expand the trial. So there is no early stop planned.
Andrew Cutler
The other major function of the DSMB, of course, is to monitor safety. And the good news is the safety and the tolerability has looked very good.
Andrea Tan
Great, thanks so much.
Sergio Traversa
Thanks, Andrea.
Operator
Your next question comes from Andrew Tsai from Jefferies. Andrew, please go ahead.
Andrew Tsai
Yes, 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 a number of the sites that you’ve had to pause, close or been able to even reopen? Are you seeing your monitoring real-time analysis? And then…
Sergio Traversa
Sorry, I can, no maybe it is me, but I can barely hear you.
Andrew Tsai
Okay, can you hear me better now?
Sergio Traversa
Much better, yes thank you. Sorry for that.
Andrew Tsai
Okay, no problem. So yes, I was just asking continuing with the real-time 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, like schizophrenia and epilepsy spaces and are you seeing an increased level of competition in terms of finding the right entity, depression patients?
Sergio Traversa
Thanks for the question. Yes, thank you, very much for the question. So in terms of sites, like the site selection is not like it’s fixed like 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 like in the competing studies or for the date, they are 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 like 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, I can give you a little bit more details because we run a clinical site. So it is more and more into the detail of the process. And the second question, would you mind to repeat it?
Andrew Tsai
Yes, just…
Sergio Traversa
Competitive dynamics?
Andrew Tsai
Yes, exactly.
Sergio Traversa
Yes. Well, there is clearly there is some competition out there and mostly I mean, usually a site does not, cannot or does not take on like three, four 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 study that the competition is much less. Then on many other programs, especially in Phase 3 that that enrolled patients in is adjunctive. We do believe there was one other company that finished the one sizable big study, a few weeks ago. But I do believe that the majority of the assays that were outside the U.S., so there was relative competition. It was not an antidepressant anyway.
We keep on hearing that the psychedelic, the psilocybin, there are lot of trials ongoing with psilocybin in depression, that is not really a direct competitor, but still it keeps the site busy. And this high dose psilocybin for PTSD and MDD. So to summarize, yes, there is competition, but we are in it like in a specific indication where the competition is much, much lower. Andy would you mind to provide a little bit more color?
Andrew Cutler
Yes, I’ll answer the second 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, does a patient will more clearly fit into one 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, so 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 and that often changes the behavior enough so that significant corrective action isn’t necessary.
Andrew Tsai
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
Yes, it’s very simple. We’ll start with a Phase 1 single dose, ascending dose of psilocybin modified release. So the interesting part is the patient population or the technically Phase 1, you do it in a healthy volunteer and but it’s well known that psilocybin is a relatively a safe product at high dose and we are using a dose very, very, much, much lower like 120th, 130th of the dose that is used as a psychedelic for the treatment of psychotic 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 the mostly PK data in obese patients. So the particular is the patient population that will be obese healthy volunteer and which will start over the next month or two and we said the within the first half, we are getting there. It’s a short study. So the old study will last like three, four months maximum.
Andrew Tsai
Thanks a lot, thank you.
Sergio Traversa
Thank you.
Operator
[Operator Instructions] Your next question comes from Louis or from Brazil. Please go ahead.
Unidentified Analyst
Hi. I this is Charles on for [indiscernible] My question about kind of the screening failure rate and if you think that’s going to kind of stay at 80 throughout this study enrollment? And then also, if you could clarify if on Reliance II screening failure rate was also 50% before the new protocol? Thank you.
Sergio Traversa
Hey, charlie, thanks for the question. And then so the screening failure is high, but we look at the reason for the screening failure and they are legitimate reasons. It usually is drug-drug interaction for concomitant, mostly its concomitant medication. So these are legitimate reasons not to enroll in the study and most of this still, the screening failures actually come from the site. And with that said, we are in constantly 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 an increase in the risk of the trial, we have been doing that.
So there are certain things that have been they especially want the drug-drug interaction that they or concomitant medication more than interaction that that have been have been changing over time. So that should facilitate. And this is a back and forth from the company and the site. So they give us feedback and we see patient with that characteristic that it’s a good fit into the trial, but we cannot put it in because of the inclusion-exclusion. So we revised and in a dialogue with the FDA, of course, we have made a few like detailed revision of the product 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 because that’s a great question, but I don’t have the answer on the top of my head and they had a screening failure on the beginning of 302. Probably there are not like 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 in the screening failure on the study 302 before we amended the protocol?
Maged Shenouda
I don’t believe it was like…
Andrew Cutler
Yes, go head Maged, sorry.
Maged Shenouda
Go ahead, Andy.
Andrew Cutler
Yes, 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 soon.
Maged Shenouda
Yes, exactly. But I would not be put off by saying so we’re trying to find the right patients and that’s critically important. Patient selection is absolutely a source of failure in studies.
Unidentified Analyst
Okay.
Sergio Traversa
And yes, as we mentioned in some of our calls, one of the biggest change in the amendment we made to the protocol is that there is now a requirement for medical and pharmacy records, and that’s by itself increase the screening failure. But also at the same time, you are relatively comfortable that that patient comes from like from a doctor that has diagnosed and prescribed medication and that the patient purchased the medication from the pharmacy. So the two things they go together, high screening and failure. But yes, there is clearly an improvement in the risk profile of the patients enrolled. I hope that answers your question.
Unidentified Analyst
Yes, thank you.
Operator
There are no further questions at this time. I’ll turn it back to Sergio for closing remarks.
Sergio Traversa
Thank you. And 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 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 investigational medicine through development. Thanks a lot to everyone for the attention and the interest and looking forward to the next conference call.
Operator
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
