Q1 2024 Relmada Therapeutics Inc Earnings Call

Participants

Tim McCarthy; IR; 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

Andrea Tan; Analyst; Goldman Sachs

Andrew Tsai; Analyst; Jefferies

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to the Royal mater Therapeutics, Inc. First Quarter 2024 financial results conference call. At this time, all lines are in listen only mode following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the offer call is being recorded on Wednesday, May eighth, 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 Theresa, and Chief Financial Officer magazine.
Earlier this afternoon, Renato issued a press release providing a business update and announcing financial results for the three months ended March 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 parameters 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 robotics 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, May 8, 2024. Remodel 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 Royal mother First Quarter 2024 conference call. We continue to achieve meaningful progress in the advancement of our ongoing Phase three program for real-time 17 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, Maggie 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 three program for around 1017. As a reminder, Rama, that is focused on developing rather than 17 as an adjunctive treatment for MDD. We previously executed important revision to Reliance to the ongoing study three zero two, which is a Phase three two arm placebo-controlled pivotal study evaluating well, 1017 25 milligrams for adjunctive MDD, please modification were aimed at controlling placebo response and improving the profile of patients enrolled the amended Study three oh two 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 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 to based on our current projection. We continue to expect Reliance 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 three trial for Roclatan 17 relight or Study three zero four. That also has a planned enrollment of approximately 300 patients like Reliance to relight is a randomized double-blind, placebo-controlled four week trial evaluating the efficacy and safety of route and 17 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 Migros total score from baseline to day 28 for rail 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 millions to M-real. Given this the screen failure rate in this study has increased to approximately 80% versus approximately 50% in Reliance one and RELIANCE three, our previously completed Phase three trial rather than 17 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 one studies are required for a potential well 1017 NDA filing. And our current focus is on executing the remaining two Phase three studies, three oh two and three or four.
Moving on now to the promising novel modified release psilocybin program, we continue to anticipate the initiation of a single ascending dose Phase one 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 two A. 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 ASLD. meeting the Liver Conference. These results showed the beneficial effect of low chronic dose silo siding on multiple metabolic parameters in a rodent model of metabolic dysfunction associated they are targeting liver disease or MASLD. Based on these data load, those silo siding could improve lipids and glucose with potential for fewer side effects over other investigative treatment approaches as GLP-1, such as GLP-1 glucagon at GIP.
So to summarize our multiple upcoming key milestones over the next 12, 18 months. We anticipate the ongoing Reliance to study to be completed with top-line data in the second half of this year. In addition, we anticipate initiating a Phase one clinical trial for our modified release formulation of psilocybin before the end of the current quarter. And lastly, while Magat will provide a detailed review of our financials, I would like to highlight, 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 31st, 2024, which I will now review for the first quarter ended March 31st, 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 three 10 in the third quarter of 2023, as well as Reliance one and three, 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 31st, 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 noncash 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 31st, 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 31st, 2024, we had cash equivalents and short-term investments of approximately $83.6 million compared to $96.3 million as of December 31st, 2023. Cash used in operations in the first quarter of 2023 was [$13.8 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. Ladies and gentlemen. We'll now begin the question and answer session. If you'd like to ask a question, please press star followed by one. If you'd like to withdraw your question, please press star followed by two. You're using a handset. Please lift the handset before pressing any keys Your first question comes from Marc Goodman from Leerink Partners. Mark, please go ahead.

Hi, this is asthma on for Mark. I had a question about the alliance and rely trials ongoing realized and unrealized trials, you actually mentioned something that you were monitoring the trial monitoring and looking at the blinded data before in the previous call or 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 relied 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 Tom, about the strategy that you implemented to reduce the placebo response.

Sergio Traversa

Yes, sure. And thanks for the question. I'll give you like the top-down answer and then we have Dr. Andy Andrew Cutler, these our clinical advisers on the call. We'll provide a little bit more more details about the these aspect?
Well, first, let let me let me say something about the blinded data and write the there is no absolutely no way to get from the blinded data, the outcome of a clinical trial and why we did that we are seeing is that in the last in the last two trials that we had. So so the the help that we can get so everybody can get from monitoring the blinded data is only an exclusive exclusively exclusively to see the right there is something that it's not like I am that doesn't make and all I can find the right word, but that is not consistent, right?
For a given example, if there are individual patients with the Madras scores week-over-week goes up and down up and down or we call it Zig-Zag, then you know that there is something that is not right, can be the patient or can be the site, but usually a patient that response is consistent over four weeks and if it doesn't respond to stay consistent over the the four weeks. So if you see a zigzag that's a signal that something is not it's not like it's all consistent. And so we take a look to that to the patients and mostly to the site.
So that's the really the only help that you can get from that from the blinded data. But it is important right to continue to monitor to see that not many of these patients with these zigzag pattern. I get into the trial when he's in the results and we can do, but we can write a laser device and advise the decide that something is kind of like a red flag. Andy, about 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 Madras 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 Madras, which is measuring depression symptoms. So you look for that I would say also that in the previous trial and the sites, we're allowed to enroll rather quickly without watching the quality as closely as we're doing now. And that's because 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, 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.

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 palm 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 I have one follow-up question.

Sergio Traversa

Yes, and good afternoon, Andrea. Thanks for the 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 more more details. But in general, for first, you contact the site and you discuss like any detail regarding patients or patients that there's some inconsistency and then now the 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 1020 patients because that would affect the ALL trial. Sort of the ultimate measure is to close the close the site. But in the end you, Andy, I'm sure I didn't 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 that 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. So 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, please, for the DSMB to recommend stopping the study early as they have in your prior trial.

Sergio Traversa

So the 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 like a 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 for if we have to expand the trial. So there is no early stop planned.

Andrew Cutler

The other major for us. 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, great things to mention.

Operator

The next question comes from Andrew Tsai from Jefferies. Andrew, please go ahead.

Andrew Tsai

Yes, congrats on 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 sites that you've had the pause closed or been able to even reopen? Are you seeing your view on it real-time analysis also. And we say --

Sergio Traversa

I can barely hear you.

Andrew Tsai

Okay, can you hear me better now?

Sergio Traversa

Much better now. Sorry for that.

Andrew Tsai

Yes, thank you. Sorry for that again. I'm from So yes, I was just asking a continuing with the real-time study 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 had 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 it depression patients?

Sergio Traversa

Thanks for the question. Okay. Yes, thank you. Very much for the question. So in terms of size, right, deem it like the site selection is not like it's fixed later. You Decide 50 60 sites at the beginning. And you finish with the same sites it season on volume, Brian, in the process. So I 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 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 the maybe, Andy, when I 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 are some competition out there. And the by the mostly I mean, usually side does not. We cannot and does not take on Phase three for 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, does the ad and on many other program, especially in Phase three that that enrolled patients in is adjunctive. We do believe there was one one other company that finished the one sizable now big study, a few weeks ago.
And but I do believe that the majority of the assays that were outside the US, so there was relative competition. It was not an antidepressant anyway. We keep on hearing that the psychedelic, the silos SiBEAM. And then I had a lot of trial ongoing with psilocybin in depression, and it is not really a direct competitor, but still it's a it gives us site the site visits and is high those silo siding 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 and it would you mind to provide a little bit more color?

Andrew Cutler

I'll answer the second first, and that is that and so Joe's 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 at sites to close for various reasons, that's certainly true. But we have we have stopped enrollment at a couple of sites. 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, you know, significant corrective action is and isn't necessary.

Andrew Tsai

That makes sense. And then I guess regarding the Phase one 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 one as single dose ascending dose of psilocybin modified release. So the interesting part is the patient population or the technically Phase one, you do it in a healthy volunteer and but it's well known that psilocybin is a relatively safer, a safe product at high dose and we are using it does vary very much, much lower 120th, 130th of the of the dose that is used as a psychedelic for the treatment of psychotic and diseases.
So on the safety side, we feel extremely comfortable. And but the indication that we'll pursue for silo saving is into the metabolic space, so obesity and glucose and fatty liver. So the data that we are looking for is the mostly PK. and data in obese patients. So the particular is the is the patient population that will be obese healthy volunteer time, which will start over the next month or two. And we said the within the first half.
So we get in there. It's a short study. So the old study will last like three, four months maximum.

Operator

Ladies and gentlemen, as a reminder, if you'd like to ask questions, please press star followed by one. Your next question comes from Louis or from Brazil. Please go ahead.

I this is Charles until oil. I'm asking a 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 to screening failure rate was also 50% before the new protocol. Thank you.

Sergio Traversa

Charlie, thanks for the question. And then so the yes, the screening phase or is it's high, but we look at the reason for the screening failure and they are they're legitimate and reasons rise usually is drug-drug interaction for concomitant, mostly concomitant medication. So they are these are these are legitimate reason not to not to enroll in the study and most of the steel, 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 the 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 revise 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 I'm it did the screening failure on the at the beginning of three or two. Probably there are not like a lot of patients overall. So I don't know how much that number is and it is meaningful, but maybe Andy or Maggie, if they have some more color on that in the screening phase on the studies used to before we amended the protocol, I don't believe it was the only network.

Maged Shenouda

(multiple speakers) Go ahead, Andy. Yes, it will certainly not quite as high. I don't want to put a number out there without confirming with under our internal team. And so we'll have to get back to you soon.

Andrew Cutler

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.

Okay.

Sergio Traversa

And yes, as we mentioned in some of our calls by the peak, 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 a from a doctor that is diagnosed and prescribed medication and that the patient actually purchase 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 answer your question.

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 real-time 17, 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 remodel 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 route and 17 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 term 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.