RLMD (2020 - Q4)

Greetings. Welcome to the Relmada Therapeutics Incorporated Fourth Quarter and Full Year 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the call over to your host Tim McCarthy. Please go ahead. Tim McCa

Thank you, operator. And thank you all for joining us this afternoon. With me on today’s call our Chief Executive Officer, Dr. Sergio Traversa; Chief Financial Officer, Maged Shenouda; and Chief Accounting and Compliance Officer, Chuck Ence. This afternoon Relmada issued a news release, providing a business update and announcing financial results for the fourth quarter and full year ended December 31, 2020. 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 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 the 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 and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, March 23, 2021. 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’d like to turn the call over Sergio. Sergio?

Thank you, team and good afternoon to everyone. I’m very pleased to welcome you to Relmada first ever earning conference call. We do believe that the company has reached a maturity time that is a good time, a right time to have a call. And since we expect a significant number of near-term catalysts moving forward, we intend to also update calls on a quarterly basis. The plan for today -- because this is our first turning call and some of the people connected may not be very familiar with the company; we’ll begin with a brief overview of Relmada, our promising lead product candidate for the adjunctive treatment of depression REL-1017, and the large market opportunity that we are targeting. We’ll then turn the call over to Maged who will review our financials. And after that I will provide an update on our most recent accomplishment and review upcoming milestones, and do my best to leave as much time as possible for your questions. As a brief background on how we arrived at this critical point in our company -- corporate evolution. Relmada is a late-stage central nervous system, CNS company, focused on the development of REL-1017 which has the potential to address the significant unmet medical needs of major depressive disorder, MDD. There are about 17 or more million people in the U.S. they are affected by MDD, and they have limited safe and effective therapeutic options. A standard antidepressants can take upto four to six weeks to show efficacy, and upto 65% of the patients do not respond or do not respond well to their first antidepressant treatment, and there are about 30% of the patients they don’t respond up to four different antidepressant treatment. REL-1017 has been developed as a new chemical entity, it’s orally administered as a once daily pill. We have patent protection upto 2033 with additional patent filed that could extend exclusivity to 2038 and beyond. We have over 50 that shouldn’t [ph] patents for REL-1017 and fast-track designation for the adjunctive treatment of MDD. So based on the novel mechanism of action and phase 2 data that showed statistically significant rapid and sustained antidepressant effect with a favorable safety and tolerability profile; we do believe that REL-1017 has the potential to be the first FDA approved antidepressant for the adjunctive treatment of MDD. In the phase 2 study REL-1017 achieves statistically significant -- significance compared to placebo on all evaluated efficacy measure. Specifically, there was solid effects we observed on the micro scale, that is a well-established measure of the severity of depression with P value below 0.03, and the large effect size 0.7 upto 1.0 from Day 4 to Day 14. The extended efficacy upto 14 days was well beyond the 7 days of dosing in the study, and it may suggest the potential neuroplastic and synaptogenic effect. Very importantly, there were no notable adverse events observed in the trial with no evidence of treatment induced dissociative or psychotomimetic [ph] medical opioid withdrawal symptoms. In December of last year, we initiated RELIANCE I that is the first trying of our phase 3 program of REL-1017 for the adjunctive treatment of depression. I will review the ongoing phase 3 program and discuss the upcoming milestones shortly. But before I do that, I will turn the call over to Maged for his review of the financial. Maged, it’s all yours.

Thank you, Sergio and good afternoon, everyone. Today we issued a press release announcing our business and financial results for the fourth quarter and full year ended December 31, 2020, which I will now review. For the fourth quarter and year ended December 31, 2020, total research and development expense was approximately $14.9 million and $36 million respectively, as compared to $1.6 million and $7.9 million for the same periods in 2019. The increase was primarily related to an increase in costs associated with the execution for a broader clinical program for REL-1017. Total general and administrative expense for the fourth quarter and year-ended December 31, 2020 was approximately $6 million and $24.9 million respectively, as compared to $2.9 million and $7.2 million for the same periods of 2019. The increase was primarily due to an increase in salaries and stock-based compensation. For the fourth quarter and year ended December 31, 2020 we recorded a net loss of approximately $20.8 million or $1.28 per basic and diluted share, and $59.5 million or $3.81 per share, basic and diluted respectively, compared to a net loss of $4.5 million, or $0.40 per basic and diluted share and $15 million, or $1.62 per basic and diluted share in the same periods of 2019. At December 31, 2020 the company had cash, cash equivalents and short-term investments of $117.1 million compared to $116.4 million at December 31, 2019. We expect this strong cash position to support us through at least multiple data readouts we anticipate through the first half of 2022. I will now hand the call back to Sergio for additional remarks. Sergio?

Thank you, Maged. As we had the recent announcement, I mean last week, I would like to start with an update on the human abuse potential, our HAP studies. We recently announced that we early discontinued study 120 which was assessing REL-17 liking versus oral ketamine as an active control. As a pre-planned and blinded analysis of the initial study completers we’re representing approximately 20% of the planned 40 patient showed that a large percentage of this patient did not separate oral ketamine from placebo, which we believe was due to the poor bioavailability of oral ketamine. Very important, no dissociative or psychotomimetic events were observed in any of the treated subjects in all arms. To avoid the futility, we discontinued this study and we will submit a new study design protocol to the FDA within the next month, and proposing an intravenous ketamine as an active compared to -- that has a very established -- very good and established history as an effective positive control. We anticipate the top line data from the IV ketamine control study by the end of this year. Again, we would like to underscore that neither in the discontinued study, nor in the previous clinical studies in our program or historically in existing literature, methadone [ph] has been associated with any psychotomimetic synergetic effect, and we are encouraged by the confirmatory effects of these results. The HAP study 124 that is comparing REL-1017 to oxycodone continues as planned, and we will expect top line data from this study by the end of the second quarter. This HAP study will be important in supporting the NDA submission for REL-1017, specifically for the FDA evaluation and DEA determination of scale [ph], but they will also represent an important opportunity to add to the existing sound body of literature that clearly differentiate REL-1017 from methadone and A) perceived association with dissociative symptoms or opioid effect. I will now share the key aspect of RELIANCE; i.e. our phase 3 program for REL-1017. The pivotal studies, RELIANCE I and II consist of two sisters, two arm placebo-controlled trial that include 364 patients for study across 55 sites. These studies will evaluate 25 milligram of REL-1017 and placebo on top of the patient’s existing antidepressant treatment. These are patients who have failed to respond to minimum one upto three previous courses of antidepressant therapy in the current depression episode. The primary endpoint of this trial is changing model score at Day 28, key secondary endpoints include change in model score at Day 7, and CGIS score at Day 28. We believe that our phase 3 program is optimized to reduce the placebo effect risk based on the design as a true arm study, the strong focus on site selection and their training and the multiple levels of screening to ensure accurate patient diagnosis. Our first phase 3 trial RELIANCE I is rolling as expected and sites have come online nicely. We continue to anticipate the top line data from RELIANCE I in the first half of 2022. The second phase 3 trial, RELIANCE II is a mirror study of RELIANCE I and is expected to begin immediately. Data from this trial topline also expected in the first half of next year. RELIANCE OLS, the open label safety study, began recently and it is enrolling patients. This trial includes patient from RELIANCE I, RELIANCE II but also de novo patients. We are also on-track to initiate our study evaluating the use of REL-1017 as a monotherapy for MDD in the second quarter. We are currently evaluating option for these study design and we will provide greater details once this is finalized. As you have just heard it is an extremely busy clinical development period of Relmada with several key data results over the next three to 15 months. Importantly, as Maged highlighted, we have a strong balance sheet with enough cash to support us through all of these respective data points. I would like to take a moment to express my gratitude to the Relmada team for their hard work and dedication to executing on our mission. I would also like to extend my sincere thanks to the patients and clinical partner involved in the REL-1017 clinical trials for their efforts in advancing this important therapy through the clinic as expeditiously as possible. With that, we will now open the call for questions. Operator, can you please open up for questions.

Absolutely. [Operator Instructions] Our first question comes from Andrew Tsai with Jefferies. Please go ahead. Andrew, your line is live.

Hey, good afternoon. Thanks for taking my questions, and congrats on all the progress, guys. So, maybe for those in the audience; help us understand -- remind us at a high level. You know, you have these two abuse liability studies reading out very fairly soon. So, remind us what would you like to see on the vast likability scores for both of these studies? What would positive data be like, as we think about the three 1017 doses versus the two competitors versus placebo? Just maybe talk us through that. And I have a follow-up? Thanks.

Sure, thank you, Andrew. Maged, you want me to take this?

Sure.

The -- so very top down; these are not very complicated studies. And if you look at like every study, the data point that we expect, and that people should look at as soon as the data are available is the -- each of -- of the three different doses of REL-1017 or less s-methadone [ph]; so 25, 75 and 150 milligrams will have to be statistically different from the control in this case is 40 milligrams of oxycodone and the ketamine study, ketamine IV in the 120 studies. This is really the two things that matters, one thing that they would like to clarify, as a question that we have been asked for some time or frequently, s-methadone to be de-saddled or non-saddle [ph], it does not need to be same as placebo. It is an antidepressant, it is a CNS active drug. So it’s possible and easily possible that it will differ from placebo if you take many of CNS active drug, there are no placebo. And but the key point is that there has to be statistically significantly strong control. I hope I answered your question.

That’s very clear, Sergio. Thank you. And my second question is, I don’t know if you’ve thought this through. But for the oxycodone study that’s reading on Q2, I guess, what would be some AE’s [ph] of interest? That would indicate euphoria, for example? And can we expect those AE’s [ph] to be disclosed in the upcoming top line data beyond just like ability scores? So basically, I’m just wondering, how are you thinking about sharing the top line results when it happens? Thanks.

It’s a good question, Andrew. We will decide when we see the data, but you know, top line, usually, you receive really just very limited information that the one that matters, and then, you know, a few weeks later, you receive the more detailed data. I assume there is anything notable, the data will be provided to us. And we will, of course, we will disclose it. Ultimately, what really matters is the device score and the statistically significant. We have treated many patients with s-methadone [ph] now, and we know how the profile looks like pretty well. So we have phase 1, phase 2; so we are not expecting any surprise from s-methadone profile.

Thank you guys. Appreciate it.

Thank you. Andrew.

Next question comes from Marc Goodman with Leerink. Please go ahead.

Yes, just to confirm a few things. One is when the oxy data comes out, that will be a press release. You’re not waiting for the ketamine data since now they’re both not coming out, you know, near the same timeline, right. Is that true?

Yes, it’s Maged. Good afternoon by the way. Yes, it’s absolutely true. Reason being that the oxycodone data is by far more, they’re both material but the oxycodone is more important than.

I’ll just make sure that we will get that press release whenever it is in the second quarter. And then secondly, on oxy that have steady, so your view is that none of the doses can be relatively like oxy, right? I mean, that 150 can’t be like oxy even though it’s multiple times the 25 that you’re going to be using in the real world, right?

Correct. Look, we have this is not really a like tossing your coins kind of trial. We have 13 patients treated with 150 in phase 1. None of them showed any of you like, effect or oxycodone like effect. We have 21 patients in phase 2 that was the 50 milligram arm that is a loading those they took 100. None of them showed any oxycodone like effects. And we do have enough evidence that even the 150 does not have any, even close to what the effects of oxycodone can be. Of course, we have to show it in a control study. But, we have quite a bit of evidence already out there.

And then, lastly, could you just any update on enrollment? How many sites are up and running for RELIANCE I? That’s it. Thank you.

Yes, you got me. This is evolving very quickly. So I don’t have the exact number. Maged, do you know. We are getting close to all oversights involved because we will start very soon RELIANCE II so we wanted to wait to have RELIANCE I well up and running before to start the second one. I don’t have the exact number, but it’s close to having all of them up and running.

Thank you.

Next question is from Joon Lee with Truist Securities. Please go ahead.

Hi, thanks for taking our questions and thanks for the update. So for the upcoming human abuse potential study, has there been a similar pre-planned analysis for the HAP study using oxycodone as an active competitor, as what was done for the ketamine study? And if so, was oxycodone behaving as they should be based on the historic data? And, you know, also what’s the explanation for the oral ketamine not separating from the placebo in your ketamine HAP study and I have a follow-up. Thank you.

Okay, so the first one is, if the quality controls me, yes, the answer is yes, we usually everybody, I think usually does a blinded quality control data just to be sure that there is nothing like unexpected or nothing we are about data and it’s mostly done for safety. So and we have seen that with oral ketamine, it was kind of also looking at utility that is, like, not very complicated to understand it. Five arms, there was no like ability at all, and one of the five arms even it was blinded, but there has to be ketamine because every patient takes every arm. So and he was obviously forward that wasn’t an issue with ketamine, but behaving is a control the valuable control. So we haven’t done it yet. And the oxycodone study started a couple of months after the ketamine study, the only reason being that the size that is doing and need a little bit more time to get up and running, they were busy with other things. So we had to wait a couple more months. So at some point we do the analysis, but if there is nothing notable, we will not even know it, that it happened, they only will notify us as something that we show that you know there is any unexpected effect or side effects or anything like it’s happened with ketamine that said, look, this thing doesn’t look, it’s going in the right direction.

Or you weren’t alerted, because the ketamine arm didn’t separate from placebo by whoever was conducting the study. But for the oxycodone, HAP study using oxycodone, you don’t know, and you won’t know is there is no real issue with the study.

Right, we will only be notified if there is something that the material that we need to know. The only side effect or something safety or something that make that the study will not generate any valuable, useful results like ketamine.

And then, like following up on Mark’s question; the hundreds of the arm or any one of the dosing arms actually does not separate from the active comparator statistically, do you automatically get scheduled to or what’s the sort of decision tree after that? I mean, the ideal situation, it would be as you described, none of the doses are likable. But if one of the doses happened to be likable, what’s the process?

Yes, it is a great question, Joon. Yes, there are, we’re not hiding the likeability of the results of the study is important, but it’s not the only factor that will determine the scheduling ordinal or non-scheduling of s-methadone [ph]. The -- there is -- there are eight factors that the FDA considers when they determine the recommendation for the DTA. One is likability, and it’s very important. If you don’t like something, it’s more difficult you get, you abuse it or you get dependent on it. But there are other factors like, look the FDA at the end is the real focus is on safety. And the reason that the oxycodone or the opioids, they are a lot more under scrutiny and the focus of the FDA is not because they’re more abusable than ketamine or than alcohol or the PCP and it’s because they’re dangerous, right if you over dose an opioid. You can have respiratory depression and unfortunately, you can have some serious consequences. If you over those ketamine happened, but you fell asleep as soon as it is an anaesthetic specifically, because it does not give respiratory depression. And the dangers or the potential risk is a very important factor in determining the schedule, right? That’s why ketamine is scheduled three, not because it’s less abusable than oxycodone is because it’s dangerous than oxycodone. There are a lot of these factors. So likeability is one and then you have dangers, the history, the pharmacology, and so on. So, clearly, likability is important. To answer directly your question, if by chance, one of the doses of d-Methadone will not separate statistically from 40 milligrams of oxycodone, then it will depend on you know, the FDA overall analysis and how they will consider the other factor. Consider that as d-Methadone in the past is being used, that user has been tested at 900 milligrams, and nothing happened, people did not like it. And nothing experience any serious side effects. 900 milligram is 36 times, I believe, is 36 times the therapeutic dose. And so definitely we feel comfortable that safety is not the major potential risk for s-methadone.

So, it’s not an automatic scheduled to, is one of the doses have.

Correct.

That’s helpful.

Next question is from Yatin Sunejawith with Guggenheim securities. Please go ahead.

Hey, guys, this is Edie [ph] on for Yatin. Thanks for taking the questions. So just you talked about for RELIANCE I on sort of the checks that you are the screening multiple levels of screening that you’re taking. So can you just talk a little bit more about the steps and how you’re ensuring that you’re not enrolling professional patients? And then, what would be a placebo range for the major improvement that would give you confidence that you had a proper screening process? And then, I have a follow-up for the human study?

So, let me take this one. So how do we avoid or reduce the risk of having non-depressed patients in the phase 3 in RELIANCE. Besides two arms that is easier to, the placebo effect is lower than multiple arms, specifically for the patient selection. And one point that we’d like to make to make, we have been advised by our advisor that the major risk in running a phase 3 trial for depression is actually the patient selection, because those are connected with the placebo effect. So, we have multiple stream that the site select the stream the patient, and then they propose that the patient meets the criteria to be enrolled in this study, then we have the CRL that themselves they will review the data and they will evaluate if there is any risk of having this patient is may not be the price may have some other issue or maybe a personality disorder or the data also seen by I believe I was CMO for the safety control and clearly the reason opinion here. There is probably the most important of the steps beyond these three steps is the review done by a group. Maged, can I say the name yes [indiscernible]. CT&I is a group that was a bit it was not from MGH or Harvard. And what they do they re-diagnose the patient. So only the site and CT&I, they have a contact directly with the patient. So it’s a phone interview. And they administered a different scale. So it’s not Hamilton, it’s not [indiscernible], the administered is clinical safer; that is considered more of the patient as an entity, right? For example, they look at the history of the patient has been depressed in the past, and or there has been an event that has generated the current episode of depression. So it gives a little bit more complete picture. And they have the last say on the patient if it is suitable for the trial or not. So we have four different ways in which the one, the last one the CT&I, and we do believe is effective. We use it in phase 2, and you have seen the results was pretty effective the way. I hope I answered.

Yes, that’s great. Thanks for that color. And then for the ketamine abuse liability studies, can you just give like a little more logistics on how they run a trial with multiple different routes of administration? And will the placebo also have to be IV or sort of how does that work in terms of making sure the patients are getting an accurate competitor if they’re getting oral versus IV drugs?

Yes, the answer is yes. There’s going to be a IV placebo and the IV oral.

Okay. Thank you.

Next question is from Jay Olson with Oppenheimer. Please go ahead.

Oh, hey, guys, congrats on the progress. And thank you for taking my questions. I was curious about the startup activities that remain to be completed before initiating the RELIANCE II second pivotal trial, and also the phase 2 monotherapy trial. And whether or not you expect to initiate the phase 2 monotherapy trial before or after RELIANCE II starts.

Yes. Maged, this -- Maged, it’s really helpful in looking at the operation is entirely, Maged do want to take this?

Sure. Thank you, Sergio. Thank you, Jay for the question. So with regard to RELIANCE II, I can safely say that were close to initiating that study, I think most of the operational pieces are in place right now. We’re not quite there yet. But look for that to officially start kick off shortly. So with regard to can you repeat the second question, Jay?

I was wondering for your phase 2 monotherapy trial? What remains to be done before you can initiate that study? And should we expect that before or after RELIANCE II initiate?

So, I’ll answer the second question first. So expect that after RELIANCE II starts, we still have a fair amount of work. We’ve completed the protocol. We’ve submitted it to the FDA, we’re about to submit it to the FDA. And, you know, we have also selected a CRO. So I think, you know, a lot of pieces are coming together. But our expectation remains that we’ll start that study by the end of the first half.

Okay, great. Thank you. And are there any details about the study designed for the monotherapy study that you can share with us?

I think we’re not quite prepared to do that yet. So give us some time it will be able to, you know, give you a more full characterization of the study. You know, you can expect it to be very similar to the RELIANCE I and RELIANCE II studies and you know, in that it’ll be two arms, placebo versus 25 milligrams of REL-1017 de novo patients, but beyond that, we’re not ready to disclose number of sides and such, you know, in any limitations on patient selection.

Okay, got it.

Jay, the biggest difference is going to be the patients. So adjunctive treatment versus monotherapy.

Okay, got it. Thank you again for taking the questions.

[Operator Instructions] Our next question comes from Salveen Richter with Goldman Sachs. Please go ahead.

Hi, everyone. Thanks for taking the question. This is Andrea [ph] on for Salveen. Sergio, maybe a question for you just based off of what you saw from the oral ketamine study, understand the positive control didn’t separate here. But does this give you any increased confidence in the profile of REL-1017? And what you might expect to see versus the oxys?

Well, good afternoon, Andrea, and thanks for the question. Well, yes, with the limited, that is limitation that was a blinded analysis. So we don’t know who took what, but they all took all arms. So we have seen no evidence of dissociation, hallucination, delirium, and out of body experiencing any of the patient has been reviewed, that was 20% of the plan that total. So if clearly, s-methadone [ph] did not show anything, because even blinded, there was no sign of this in any of the answers. So yes, it gave us a good level of confidence that the profile confirms what we have seen in the historically in the literature that we have seen in phase 1, in phase 2. And clearly, we have to prove it, but we see is a little bit like unlikely that a drug will behave differently into similar study just with a different control arm. So nobody liked it. Nobody has experienced anything that could be likable in the ketamine study. So it is possible, but we see it is unlikely that we change totally behavior. Yes, the answer is yes. It gave us support that the confidence that we have that methadone [ph] is not a likeable compound.

Yes, we’d like to turn the floor over to Sergio for closing comments.

Okay, well, thank you, operator. And thank you, all of you for joining us our call today. It was our first one. So it will be remembered. But we look forward to the year ahead, and we will provide further update in throughout 2021. So, thank you all, again, and I hope you will enjoy the rest of the day.

This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.

Thank you.