Q4 2023 Relmada Therapeutics Inc Earnings Call
Participants
Tim McCarthy; Investor Relations; LifeSci Advisors, LLC
Sergio Traversa; Chief Executive Officer, Member of the Board of Directors; Relmada Therapeutics Inc
Maged Shenouda; Chief Financial Officer; Relmada Therapeutics Inc
Andrew Cutler; Senior Clinical Development Advisor; Relmada Therapeutics Inc
Uy Ear; Analyst; Mizuho
Andrew Tsai; Analyst; Jefferies
Andrea Tan; Analyst; Goldman Sachs
Presentation
Operator
Good afternoon, ladies and gentlemen, and welcome to the Relmada Therapeutics, Inc. Fourth Quarter and Full Year 2022 Results 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, a recording needed assistance, please press star zero for the operator, and this call is being recorded on Tuesday, March 19th, 2024.
I would now like to turn the conference over to Tim McCarthy. Thank you. Please go ahead.
Tim McCarthy
Thank you, operator, 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 and 12 months ended December 31st, 2023.
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, Ram and his 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 Rome, modest 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, 2023 and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, March 19th, 2024 from auto 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
Thank you, Tim. As always, good afternoon to everyone, and welcome to the realm of the fourth quarter and full year 2023 conference call. We are continuing to make solid progress in advancing the ongoing Phase three program around 1017 in major depressive disorder, MDD, as well as in the promising preclinical, no silo saving program, all of which I will briefly cover today. Following this, Magat will review of our fourth quarter and full year 2023 financial results, and then we will take your questions.
Let's begin with an update on the Phase three program for route and 70. As you know, from others focus on developing well, 1017 as an adjunctive treatment for MDD. As previously communicated, we have made critical changes to Reliance to the ongoing study three zero to a Phase three two arm placebo-controlled pivotal study evaluating breadth and 17, 25 milligrams for adjunctive MDD aimed at controlling placebo response and improving the volume and quality.
The amendment 33 or two protocol has been implemented across all our clinical sites sorry, enrollment continues to steadily progress and our ability to leverage our close relationship with the study site is paying dividends Moreover, the ongoing initiatives we put in place to drive trial awareness with prospective patients are all also bearing fruit. Importantly, we are evaluating the productivity of sites on a real-time basis and making changes where needed.
As a reminder, we plan to enroll approximately 300 patients into Reliance based on our current projection. We expect the enrollment into RELIANCE two to be completed in mid 2024 in our second Phase three trial for 1017 named relight or Study three zero four. We begin dosing patients during the third quarter of last year for Life also has a planned enrollment of approximately 300 patients that is planned to be completed by year-end 2024.
To reiterate what we have said previously, like Reliance to realize is a randomized, double-blind placebo controlled four week trial evaluating the efficacy and safety of relative 17 as an adjunctive treatment for MDD in patients experiencing inadequate response to ongoing background antidepressant treatment. The primary endpoint of both studies is the same as the change in the Madras total score from baseline to day 28 as compared to placebo.
I should highlight that we made significant changes to our screening and enrollment processes in order to ensure that we have patients that meet all the quality criteria. More specifically, we have instituted a comprehensive adjudication process through which we now require medical records for all patients involved in relation to an reline.
Given this, our screen failure rate in these studies is now approximately 80% versus 50% previously, as well as one and really as three our previously completed Phase three trial for route and 17, we strongly believe that these changes will significantly enhance the probability of success of our current studies.
Of note, we have completed all the necessary preclinical manufacturing and Phase one studies required for a potential well 1017 NDA filing and are now focused on execution of various pre-commercial readiness activities.
Moving now through our promising preclinical novel modified-release psilocybin product. You may recall that at last November ASLD. meeting the labor contracts, compelling preclinical preclinical data were presented in a poster presentation. These data demonstrated the beneficial effect of low price, low chronic dose silo saving on multiple metabolic parameters. In a rodent model of metabolic dysfunction associated Seattle, liver disease, or MASL.
These initial promising preclinical results support the therapeutic potential of low chronic dose of silo citing as we said previously, based on the data, these data flow, those silo side, we could improve lipids and glucose. We have potential fewer side effects over other investigative treatment approaches such as GLP-1 glucagon or NGI.
We intend to initiate a single ascending dose Phase one trial in obese patients in the first half of 2024 to define the pharmacokinetics, safety and tolerability profile, or our modified release psilocybin formulation in this population. This will be followed by a Phase two A. trial to establish clinical proof-of-concept data from the plan 2a study is anticipated in the first half of that.
Just to summarize of a multiple upcoming key milestones over the next 12, 18 months, we anticipate completing enrollment in the ongoing Reliance to study in mid 2024 with top line in the second half. In addition, we plan to complete enrollment in the REALIZE study by the end of this year. Finally, we intend to initiate a Phase one clinical trial for the modified release formulation of psilocybin in the first half of this year.
Moving on, quite Maggie will provide a detailed review of our financials. I would like to emphasize that with current cash on hand to take us into 2025 from other remains sufficiently funded to fully execute our plans to reach data readouts from both relative and 17 Phase three trials, Reliance you are willing as well as from that the planet Phase one for our modified release. So that's IV formulation.
I will now turn the call over to Maggie to review our fourth quarter and full year financial results market.
Maged Shenouda
Thank you, Sergio. Today we issued a press release announcing our business and financial results for the three and 12 months ended December 31st, 2023, which I will now review. For the fourth quarter ended December 31st, 2023, total research and development expense was approximately $14.8 million as compared to $26.9 million for the comparable period of 2022, a decrease of approximately $12.1 million.
The decrease was primarily associated with the completion of two Phase three trials and the long-term open-label safety trial study three 10, the research and development noncash charge related to stock-based compensation totaled $1.8 million and most recently completed fourth quarter.
Total general and administrative expense for the fourth quarter ended December 31st, 2023 was approximately $12.1 million as compared to $11.8 million for the comparable period of 2022, an increase of approximately $243,000.
The increase was primarily driven by an increase in compensation expense due to higher employee related costs. The general and administrative noncash charge related to stock-based compensation totaled $8.1 million in the most recently completed fourth quarter.
For the fourth quarter ended December 31st, 2023, the net loss was $25.2 million or $0.84 per basic and diluted share compared with a net loss of $37.9 million or $1.28 per basic and diluted share in the comparable period of 2022.
Turning to the results for the full year ended December 31st, 2023, total research and development expense was approximately $54.8 million as compared to $113.3 million for the year ended December 31st, 2022, representing a decrease of $58.5 million. Again, the decrease was primarily driven by reduction in study costs associated with the completion of two Phase three trials and a long-term open-label safety trial study three 10.
For the year ended December 31st, 2023. Total general and administrative expense was approximately $48.9 million as compared to $47.9 million for the year ended December 31st, 2022. Again, increase was primarily driven by an increase in compensation expense due to higher employee related costs.
For the year ended December 31st, 2023, the net loss was approximately $98.8 million or $3.20 per basic and diluted share, compared with a net loss of $157 million or $5.30 per basic and diluted share for the year ended December 31st, 2022.
As of December 31st, 2023, we had cash, cash equivalents and short-term investments of approximately $96.3 million compared to approximately $148.3 million as of December 31, 2022. Cash used in operations for the full year 2023 was$ 51.7 million.
Based on our current clinical development plan, our current cash position provides us with ample runway into 2025 of note this time period includes data readouts from both Phase three trials Reliance to Study three oh two and relight Study three oh four, as well as the initiation of our planned Phase one trial of our modified release cycle seven formulation.
I will now ask the operator to please open the call for questions. Operator?
Question and Answer Session
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions)
Marc Goodman, New partners.
Hi, good afternoon. This [Basma] on for Mark. For Alliance two, could you please remind us again how many patients were enrolled before the protocol amendments and down? Do you expect that are due to the inclusion of these patients prior to the amendment that's there will be any source of, I would say, noise or arm to the trial or were you able to go back and check that inclusion criteria? Thank you.
Sergio Traversa
Thank you. Sergio here. Yes, that's a great question. Actually, the previously to the amendment, we are all about 89 patients and in Saudi in as of now, I mean we they will be included in the final analysis and the like. We have noticed a second spend for it for a bit. We have noticed that there was a big difference in patient enroll when the COVID restriction bear in place and end after the COVID restrictions are lifted.
So of this 80, 90 patient about half were enrolled after the COVID, the restrictions were lifted. So I mean, we deliver binders. So we don't really know how the data will look like. But but we don't have any reason to believe that the price the this patient would carry any particular baggage also because the the sites that were the issue with data was generated in the previous trials and they've never been phrased it in, right as to.
So the bottom line is that, yes, this patient will be included in the final analysis, but we don't have any particular reason to believe that the food carry any any particular burden on the final review. And we do have on the call, Dr. Andrew Parker, that is our special adviser for clinical development and maybe Andrew, if you are online, you may want to expand a little bit on the question.
Will these patients enrolled a previous to the protocol amendment carry any weight on the final results?
Andrew Cutler
Well, thank you very much. I'm here. Excuse me. I think it's a very reasonable question, but I'm pretty confident I would say I'm very confident that we should be successful. The previous study really was very close to being positive. I just missed. And so you don't have to be perfect here. We just have to be better.
I think the changes that have been made, particularly with respect to analyzing the quality of the sites and the protocol amendment will make the quality of the less the second cohort here, which is going to be the majority of the patients, I think will carry through. So I'm very confident that despite having some patients enrolled previously on therapy, I still think we're going to be successful over.
Thank you.
Sergio Traversa
Hope that answered your question.
Yes, thank you.
Operator
Uy Ear, Mizuho.
Uy Ear
Taking your questions on. So couple of so I'm just following up on the previous question at these sites that enrolled patients previously on the could you maybe elaborate on or remind us just like were most of these patients referral by physicians? And were there large volumes of patients with just a few patients at these sites on? Yes. So that's sort of the first questions. I'll ask a second question after. Thanks.
Sergio Traversa
Sure. Thank you. We West the South, the there were two sites with together. They involve about 20% of the Study three oh one, the adjunctive treatment study and the data they have never been present in three or two. And then there were a couple of pieces that we don't really know why the data of these two sites, whereas the opposite are completely different from the other 41 sites in the trial.
But you just have to accept that now that there was reality, but they had never been in the in the study due to and now we will we are limiting the number of patients enrolled for each site. So we won't have any site that will make a major impact on the final numbers. So we feel confident that with these measures and the dean one, what happened in the study three one will not happen again.
Uy Ear
Okay.
Andrew Cutler
If I could add one other quick thing. Another another modification we made was requiring medical records and to ensure that these were legitimate patients who actually were taking an antidepressant and that was not done in the three oh one study. So that's another improvement we've made.
Uy Ear
All right. Thanks. And maybe on more presently, um, could you provide some color on maybe the proportion of patients who have been so far role in Reliance to and harm? And then maybe relight as well on hand and before and after that, maybe just briefly on Magat on like just tell us help us think come think about how to model the cadence of spending is it sort of relatively flattish or what it's sort of so down towards the end of the year? Thanks.
Sergio Traversa
Yes, I'll take the first one and maybe the we may not want to go like in real details about number of patients. But side, we've had half of the trial at the end of last year, and enrollment is progressing steadily with some variability maybe week-to-week. But yes, it's a it's a different drug.
And yes, we are confident that the we had top line data in the second half of this year, like when we get closer, we'll be a little bit more precise. And but yes, we say with these a little bit broad guidance about second half of this year and reason being that we are screening.
I call it a bit of patience. I mean, I don't run, but the big number screen patient is very large. What we have noticed with the with the improvement on the protocol. Clearly, the screening failure had went up significantly and we were around 50% on the previous trial. I think I mentioned that before. We are now approaching 80%. So I mean the selectivity in enrolling patients or is it much higher?
We did look, if I can expand on the reason why these patients are not enrolled the net screen and there are legitimate reasons. And so these are the patients that generated the issue in the previous trials. And definitely, we don't want these kinds of patients again in the new trials. So the screening process, it is it's going very, very well and the screen failure for legitimate reasons, it's much higher. So we do believe that the quality is very very good in this trial. Andrew, if you want to add something?
Andrew Cutler
No, I think you've said it well, and it's in line with what I said earlier. We're really trying to make sure we have the right patients with legitimately with the illness and not durations, mild depression or who are not legitimate patients. So we're really trying to be careful about selecting the right patients.
Sergio Traversa
Magged, the second one was for you.
Maged Shenouda
Sure. So Hi, Uy. Thanks for the question. I'm so in G&A expansion followed the pattern we've had in 2023 on a quarterly basis, a lot depends on enrollment patterns for current expectation is that R&D should tick up a little bit on in the third quarter and excuse me in the first quarter in the first quarter and then again increase in the second quarter and then stay at that level through the third and fourth quarter. As you can sort of see enrollment pickup in on on three have two and then pick up in three or four as well. So I hope that helps.
Uy Ear
Very helpful. Thank you, sir.
Maged Shenouda
Sure. My pleasure.
Operator
Andrew Tsai, Jefferies.
Andrew Tsai
Yes, good afternoon. Thanks for taking my questions. So first one, I noticed in your prepared remarks, you said how you are monitoring sites in real time making changes accordingly. So what exactly are you monitoring for and what kinds of changes are you making on a day-to-day kind of basis?
And then secondly, on, are there any learnings or thoughts that you might have on Sage's recent rejection further MDD study and say not study, but the approval? And if there's any read-through or any lessons learned that you think you could apply to REL 1.17? Thanks.
Sergio Traversa
Thank you, Andrew, and thanks for the call. I will ask you after to repeat the second question because I didn't get it and the percentage. But the first question is, I think Andrew can go a lot more in details as he has run run size for 30 years and as on many, many CNS clinical trial. But there is no magic, right.
You monitor in general as you monitor every like three, four patients, four or five patients enrolled by decide how the blinded data they look like, of course, a binder. So you don't know if they are a they are good, but you definitely can have a good understanding if there is something wrong, right.
When you have data that the variability week over week of the first four week is one week one week, up one week down and you go up and down. Usually that's not the behavior that placebo and the drug do right when there is a trend, there is a trend. So that's one signal.
And then the overall quality of the site, right? How the quality is a document document in data, they put the data in the database. So there is no one single factor is a combination that can give you some sense if the size is providing like the service that EBITDA that we would license, Andy, or I mean, you have done this for a long time. You want to add anything?
Andrew Cutler
Yes, there are various quality indicators. You look forward. And I think we're watching. We're minding the store much more closely here. You look for things like either rating scales, consist entirely of kind of all moving in the same direction on you look for adherence to the protocol and what we call protocol violations, which indicates sloppiness at this time, we're being careful to not let, as Sergio said, any sites just kind of get off to the races and recruit too many patients are too fast. So there are a variety of quality and indicators you look for and consistency, things you look for as Sergio said, and we're watching those.
And then if there's a site that has issues where we're actually stopping their enrollment work, trying to figure out what's going on in deciding if we want to continue with them or not.
Sergio Traversa
Hope that answers your question, Andrew. and if you don't mind to repeat the second one because I didn't get it?
Andrew Tsai
Perfect on Serg and recently had their own NDA projected for MDD. And I'm just curious if on the reason behind that rejection has any bearing or read through to your US methadone, basically?
Andrew Cutler
Sergio, maybe I could help, maybe I could help.
Sergio Traversa
Yes, you can.
Andrew Cutler
I was very involved with that. It's really apples and oranges and their their paradigm was very different. It was a two week treatment paradigm with a very different mechanism. And really the problem was they didn't have a good story for how two weeks of treatment would hold a charge. And in their Phase two study, there was a suggestion that the efficacy continued on beyond the two weeks. However, it was not well replicated in Phase three. So the FDA had concerns about that. It's a very different paradigm, very different medicine. I don't see it as though competition as an issue or anything that would influence what we do.
Andrew Tsai
Makes sense. Okay. Thank you very much.
Sergio Traversa
Thank you, Andrew.
Both Andrews, thank you.
Operator
Andrea Tan from Goldman Sachs. Please go ahead.
Andrea Tan
Good afternoon. Thanks for taking our questions. On surgery or Andrew, just curious if you're able to share what Reliance to in the relight studies are powered to detect and And remind us what you're assuming here for placebo response?
Sergio Traversa
Yes, great. Thank you, Andrea for the question, but we haven't filed with the FDA, the final statistical plan, you usually do it at the very end. There is no advantage to do it before, but there is a fair assumption that usually what you want to detect is a clinical lead meaningful effect that according to the expert in adjunctive treatment is like 2-2.5 points.
So the trial is designed to detect that kind of a change from placebo. And that is right. That would be the minimum, right? We hope we can do better than that based on the Phase two data, but that's a fair assumption that would be the on the statistical plan and with 300 patients involved major the it's a it's but it is it is feasible, it's realistic.
Andrea Tan
And then maybe just one quick question on the RALP. a lesson here. Just wanted to confirm which indication you're looking to study this end as yet?
Sergio Traversa
We actually did not discuss the indication reason being that we don't really know exactly what kind of indication we have. We'll look at it like we have to do Phase one and for the pharmacokinetic all the parameters, the new formulations and new car new concept slowed those chronic treatment.
That what we can see is the effect that had on the rodent model that according to the expert is somewhat irrelevant for what should happen in humans. And what we have seen is that, yes, there is a material decrease in in body weight with no diet with continuing the high fat high glucose diet.
So despite like high fat and glucose that the road and they lost weight and not as much as a GLP-1, but enough to make it like a valuable drug to treat opiate obesity. But at the same time, we have seen a material decrease in glucose level quite similarly, probably little higher than Dan McCormick and we have seen a very material effect on fatty liver and all these right, continuing a diet with high fat, high glucose.
So it kind of works on all the span of parameter metabolic syndrome, so weight glucose and and fatty liver. So I mean, that's a fair assumption. That indication will be a metabolic one. We haven't decided yet yet and will be decided after Phase two proof of concept specifically what the indication will be that delta could could be maybe not obesity by itself, but now it could be also combination with the GLP-1 and to overcome some of the limitation of the GLP-1 like muscle loss.
But now the in and the where we have, we need to see the data and there is a like a wide range of possibility, all of the metabolic area and that does suitable. And we've tried to do something that is a reasonable and good way to get the drug approved in a relatively now a short amount of time?
Well, I don't have this great question. Yes, the straight answer, but that's where we are now waiting for efficacy data to make the final decision of where to go.
Andrea Tan
Got it. Maybe just one follow-up there. Have you seen evidence to date pre-clinically that that you are avoiding a loss of muscle from when you've tracked the weight loss in these rodents?
Sergio Traversa
And while in the preclinical and now we have a look at we haven't seen it because we haven't looked at that and the that is a fair assumption that the primary disease there is no change in diet, Brian, the being the the model, the road and don't lose weight because they stop eating of the reduce food intake like with GLP-1. So it's in the silo saving is five H 2A agonism and it it acts at the metabolic level. So pretty much it increase the metabolism of fat. So mechanistically is not really expected to have the loss of muscles unlike the GLP-1 one.
Andrea Tan
Thanks, everyone.
Sergio Traversa
Thank you, Andrea.
Operator
Yatin Suneja, Guggenheim.
Good afternoon, and thank you for taking our question. This is [Delma] for Yatin. So following up to the previous questions. Can you clarify if you already performed the real-time start checking in the previous Reliance studies? Or is it something that you had implemented new R&D now? And then I wanted to ask you about the statistical plan if that is done by third party or internally we got within the company? Thank you.
Sergio Traversa
But thank you for the question. Tom, if I understood correctly. The first question is that we did implement a monitoring of the sites in this study in the previous studies. And the straight answer is no and yes, there was COVID was now a little bit more complicated to do that now and then the we didn't do it. So but this was only one of the of the changes operationally that have been made in the new protocol.
And so there was one, but the R&D required for medical record is probably the biggest one and so on. But they all go as we discussed a few times and many times is to really enroll patients that are affected by biological depression, and they have a history of use as an adjunctive trial.
So the patient has to come in it already on some antidepressant and to have access to medical and pharmacy records is a good proxy to be sure that the patient is there is a real patients. These are things that we didn't do in the previous trial for a variety of reasons. And I'm so sorry, can you repeat the second one?
Yes, I was asking if the statistical plan is designed by a third party, are we internally within your company?
Sergio Traversa
No, it is that while it is designed as a collaboration and so but is it is we have the help of it like a large statistical common company independent that advise us on the status of the statistics.
Got it. Thank you.
Sergio Traversa
Thank you.
Operator
Thank you. There are no further questions at this time.
Mr. Traversa, please go ahead.
Sergio Traversa
Well, thank you. In summary, we remain confident that we do have an approvable drug in rather than 17 and are excited by the potential of our novel psilocybin and derivative programs. So we look forward to reporting on progress with our pipeline pipeline in among the in the months ahead and to close.
I'm grateful to the Relmada team for their continued hard work and dedication to executing on our mission. And I would also like to extend my sincere thanks to the patients and clinical partners involved in their own 1017 trials for their participation in the advancement of this promising investigational medicine to development. Thank you very much to everyone.
Operator
Thank you. That concludes our conference today. Thank you for participating. You may all disconnect.
