Relmada Therapeutics Inc (RLMD) 2022 Q4 法說會逐字稿

Greetings, and welcome to Relmada Therapeutics Fourth Quarter and Full Year 2022 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Tim McCarthy. Thank you. You may begin.

Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer, Sergio Traversa; Chief Medical Officer, Dr. Cedric O'Gorman and Chief Financial Officer, Maged Shenouda. This afternoon, Relmada issued a news release providing a business update announcing financial results for the 3 and 12 months ended December 31, 2022.

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 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 in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2021, 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, 2023. 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 to Sergio. Sergio?

Thank you, Tim, as always, and good afternoon to everyone. I'm pleased to welcome you to the Relmada fourth quarter and full year 2022 conference call. We are coming off from a challenging 2022, but we have learned a great deal from our completed studies and believe that these learnings better enable us to realize the potential of REL-1017 for the treatment of MDD. Following the availability of top line results for REL-1017 in RELIANCE I or Study 301 in December 2022. We have spent the last 3 months analyzing this data and considering the appropriate next steps. As a reminder, RELIANCE I or Study 301 and RELIANCE II or Study 302, our 2 Phase III sister 2-arm placebo-controlled pivotal studies evaluating REL-1017 at 25 milligrams as an adjunctive treatment for MDD. Study 302 is ongoing. We are confident that we have identified the key issues that led to the Phase III data in Study 301, differing from the positive results seen in Phase II.

As such, we intend to focus on REL-1017 as an adjunctive treatment based on the data generated to date and market potential, and we'll initiate one new trial Study 304 and implement critical changes to the ongoing Study 302. Our Study 302 protocol amendment has been finalized and is ready to be implemented immediately. And our new Study 304 protocol has been drafted and will be ready to initiate by mid-2023.

I would like to emphasize that broadly, we have learned that the 2 most important drivers for a successful depression trials are: recruiting the appropriate patients with MDD, and controlling the placebo response. It is proposed that REL-1017, unlike conventional oral antidepressant except its antidepressive effect by inhibiting and correcting the consequences of hyperactive glutamatergic pathways. It does not affect mood by altering neurotransmitter levels, and it is taught not to have therapeutic effect in the absence of underlying MDD pathophysiology, namely glutamatergic dysfunction. This suggests that the drug would therefore have no effect in the situationally depressed or in those without a true diagnosis of major depressive disorder. The efficacy signal of REL-1017 in a clinical trial would, therefore, be expected to be reduced, directly proportional to the percentage of inappropriate subject enrolling the trial. You will see from the data we are going to share with you today the impact that clinical trial subject quality had on drug outcomes.

During today's call, Cedric, our new Chief Medical Officer, will provide the key details of our analysis of Study 301 that generated many valuable insights, which influence our future plan REL-1017 clinical program. He will then review the changes we are making to Study 302, and we'll also be implementing in our study -- new Study 304. Following Cedric's comments, Maged Shenouda, our Chief Financial Officer, will review our financial results and balance sheet. But I will say that we are sufficiently funded to fully execute our plan to reach data readouts for both Phase III trials. We will then take your questions.

And I will now turn the call over to Cedric. Cedric, stage is all yours.

Thank you, Sergio, and first slide, please. To begin, you will recall that in Study 301, REL-1017 did not meet statistical significance on the primary end point. Treatment with REL-1017 did result in a 15.1 point change from baseline on the MADRS total score, but placebo-treated patients experienced an improvement of 12.9 points, representing a high placebo response. It is widely accepted by experts that it's the placebo change on the MADRS total score exceeds about 10 points, you have failed to adequately control placebo response. Despite this high placebo response, the placebo-adjusted delta favored REL-1017 and was 2.3 points, a clinically meaningful difference. Meta analysis showed that the average drug placebo difference that has resulted in the approval of oral antidepressants over the past decades has been approximately 2 points.

Next slide, please. We did see in Study 301 that a statistically significantly greater proportion of patients treated with REL-1017 experienced therapeutic response defined as a 50% or more improvement in the MADRS total score from baseline at day 28. 40% with REL-1017 treatment versus 27% for placebo with a p-value of 0.044.

Next slide, please. Now let's take a look at the per protocol analysis of Study 301. It is important to note that this was a prespecified analysis. Per protocol refers to the population of patients who were treated to day 28, and who did not have any major protocol deviations. This prespecified analysis only resulted in the exclusion of 29 patients and demonstrated a 3.1 placebo-adjusted difference in favor of REL-1017 at day 28 with a p value of 0.051, approaching statistical significance. The total N in this prespecified analysis was a robust 198 patients versus the 227 patients in the intent to treat primary analysis.

From the primary and prespecified analysis, including response rates and per protocol set, we believe the signal for efficacy with REL-1017 is clear and robust and that the continued development of REL-1017 for the treatment of major depressive disorder is warranted and justified. After obtaining the full data set and final study report for Study 301, we further analyzed the results in a post-hoc manner to see what insights we could leverage to help us as we continue to develop REL-1017. We believe the following learnings will be a substantial driving force to optimize the likelihood of success for REL-1017.

Next slide, please. As previously communicated, 2 of our highest enrolling sites were particularly impacted by paradoxical data and placebo response. When we excluded data from these 2 sites, the population was reduced by only approximately 40 subjects, and we saw a 4.1 point placebo-adjusted difference at day 28 on the MADRS total score favoring REL-1017 with a p-value of 0.019.

Next slide, please. We also found striking results when evaluating data from subjects coming into the study from different sources of referral, which for the purposes of this analysis, we divided into verifiable versus unverifiable sources of recruitment. Verifiably sourced patients were defined as patients who were known to the site such as the current patient. Patients found within the size database and referrals coming directly from health care professionals. Non-verifiably sourced subjects were those engaged through radio and TV ads, social media, Internet searches and recruitment companies. The prior studies had relied on self-reported medical history from the subjects regardless of the source of recruitment being verified or unverified. As a result, we believe that subjects recruited through unverifiable sources were not adequately vetted by the use of medical or pharmacy records to confirm the accuracy of their MDD diagnosis. Moving forward for our trials, medical and pharmacy records are mandated regardless of source of recruitment.

Next slide, please. Here, we present the change from baseline on the MADRS total score when assessing patients from verifiable sources versus non-verifiable sources. We observed that verifiably sourced patients had a change from baseline of 17.2 points on the MADRS 10 total score at day 28 versus 11.8 points for placebo. This amounts to a 5.5 point difference versus placebo with a p-value of 0.016. Again, this is a post-hoc analysis. But from these data, it is clear to us that in clinically depressed patients from verifiable sources of recruitment, REL-1017 has a strong signal of efficacy.

Next slide, please. It is also clear to us that the COVID-19 pandemic had a negative impact on trial results. This has been seen by other researchers in the MDD space. We believe that during the pandemic, many patients had situational depression, most likely related to isolation and other pandemic-related issues. When we cut the data using April 1, 2022, when COVID restrictions were largely lifted. As the demarcation point, we saw a placebo-adjusted difference of 4.1 points favoring REL-1017 on the day 28 MADRS score for the post-pandemic subgroup.

Next slide, please. Finally, we consulted with various internal and external stakeholders for additional perspective. These experts concluded that site visits in Study 301 were too long in duration with too many assessments driving up placebo response. The stakeholders also agreed that the highest enrolling sites with high placebo response were overrepresented in the final data set. Additionally, there were elements of the screening eligibility oversight that could have been improved to be more centralized rather than outsourced.

Next slide, please. Based on these critical learnings and analysis, we intend to implement changes to our clinical programs going forward with a protocol amendment for the ongoing study and study conduct changes. These changes will allow us to more accurately identify and enroll patients with a verified diagnosis of MDD and will allow us to screen fail subjects with transient or situational depressive symptoms. We will only enroll patients from verifiable sources. More specifically, we will require medical and pharmacy records from prospective subjects to verify depression diagnosis and antidepressant treatment history. As previously mentioned, in the past, we have relied solely on patient self report in these regards.

In addition, we will be making site selection improvements. We now have a wealth of data on site performance from our recent trials and input from our thought leaders that will be drawn upon to select better quality sites going forward. Moreover, we intend to limit the number of patients per site, so no single site can have a disproportionate effect on study outcomes. We also plan to make changes to the protocol to reduce the duration of site visits and assessments. Previously, there were too many assessments and procedures that resulted in lengthy and burdensome site visits. Between extensive safety evaluations and secondary assessments, the study visits ran very long.

While this is great in the sense that we now have an abundance of safety evaluations, which looked very good for REL-1017 in comparison to placebo, this hindered subject and site recruitment have herd signal detection. We will also be dramatically simplifying our protocols going forward, again, with the goal of reducing expectation bias, placebo response and enhancing signal detection. We also know that a simplified study design improves patient recruitment.

Again, just to reiterate the positive, the completed studies provide us with very important controlled safety data, which looks very good with 1017 -- with REL-1017 exposure and that is not insignificant data when it comes to filing our NDA. In the ongoing Study 302, we are planning to enroll approximately 300 patients and currently expect that trial to complete in the first half of 2024. Currently, we have enrolled 1/3 or approximately 100 patients into this study. We also intend to initiate a new study 304 in mid-2023, also with a planned enrollment of approximately 300 patients with completion anticipated in the second half of 2024. Our open-label 1-year safety study is on schedule for completion and data release in mid-2023.

With that, I will now turn the call over to Maged for a review of the financials.

Thank you, Cedric. Today, we issued a press release announcing our business and financial results for the 3 and 12 months ended December 31, 2022, which I will now review. For the fourth quarter ended December 31, 2022, total research and development expense was approximately $26.9 million as compared to $25.3 million for the comparable period of 2021. The increase was primarily related to an increase in stock-based compensation. This noncash charge totaled $2.2 million in the most recently completed fourth quarter.

Total general and administrative expense for the fourth quarter ended December 31, 2022, was approximately $11.8 million as compared to $8.9 million for the comparable period of 2021, an increase of approximately $2.9 million. The increase was primarily driven by an increase in stock-based compensation. This noncash charge totaled $9.4 million in the most recently completed fourth quarter. For the fourth quarter ended December 31, 2022, the net loss was $37.9 million or $1.28 per basic and diluted share. Compared with a net loss of $34.4 million or $1.80 per basic and diluted share in the comparable period of 2021.

Turning to the results for the full year December 31, 2022, total research and development expense was approximately $113.3 million as compared to $90.6 million for the comparable period in 2021. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL-1017. For the year ended December 31, 2022, total general and administrative expense was approximately $47.9 million as compared to $35.1 million for the comparable period of 2021. The increase was primarily driven by an increase in stock-based compensation. For the year ended December 31, 2022, the net loss was approximately $157 million or $5.30 per basic and diluted share, compared with a net loss of $125.8 million or $7.16 per basic and diluted share in the comparable period of 2021.

As of December 31, 2022, we had cash, cash equivalents and short-term investments of approximately $148.3 million compared to cash, cash equivalents and short-term investments of approximately $211.9 million as of December 31, 2021. Based on the updated clinical development plan, Sergio and Cedric shared earlier, our current cash position provides us with ample runway or approximately 2 years of cash.

I'll now turn the call over to Sergio. Sergio?

Thank you, Maged, and thank you, Cedric. So in summary, we are confident that we have an approvable drug and need to focus on clinical trial execution. Based on the results of Study 301, we now know how to identify the most reliable sites, the most suitable patients and greatly improve our study protocols. Also, importantly, all other preclinical, clinical and CMC pieces are in place for a successful NDA filing for REL-1017. Additionally, as stated earlier, we are sufficiently funded to fully execute on our plans for REL-1017 development. As we ended 2022 with approximately $148 million in cash, cash equivalents and short-term investments. We look forward to reporting on progress we studied 302 and 304 through the year.

And now I will ask the operator to please open up the call for questions. Operator?

(Operator Instructions) Our first question comes from Uy Ear with Mizuho Health.

So I guess my first question is, I think you indicated that for 302, the protocol is pretty much finalized and you've already started immediately. So have you started reenrolling and redosing patients in 302? And secondly, for 304, do you need the FDA blessing before you can start the trial? And I guess my third question is on the open-label study, what data do you think it would be helpful, I guess, for investors to look at and to gain greater confidence in your molecule?

Thank you, Uy. I believe Cedric, this question -- that's for you.

Absolutely. Thanks for the question. And I'll address them in the order they were asked. So is 302 open for recruitment? Yes, it is. It was moving a little bit more slowly over the past quarter as we worked to streamline the existing protocol and make the necessary amendments to make it a more efficient study. And we will add sites to get that study moving ahead at a nice pace. So it was never closed or paused. It was open for recruitment and now we will reenergize the efforts on that trial with the amended protocol.

With regard to the new study and the requirement for FDA blessing to run the study. All studies that we design are submitted to the FDA, and so they do have the opportunity to come back and give us the thoughts of the recommendations. But as you can imagine, we've already had quite a bit of dialogue with the FDA, and we have quite a lot of understanding about what these trials need to look like. So there wouldn't be any anticipated divergence from what the FDA would expect in a trial like this. So it's pretty straightforward.

And as to what kind of data come from the open-label study would be of interest to the community. I suppose the very fact that running a 12-month open-label study allows you to get your necessary safety exposures. That's important for the NDA filing. Looking at in an open-label setting, we were setting grades of adverse events. We'll contextualize what patients might expect once they get this treatment in the future and discontinuation rates or this of interest. And from the efficacy perspective, it's real-world efficacy findings, you can look at the time line of treatment effect and also then because it's a long-term open-label study, you can learn quite a bit about as sustained response and treatment out to 12 months.

Our next question is from Marc Goodman with SVB Securities.

It's Rudy on the line for Marc. Question regarding Study 302. You mentioned a study earlier around 100 patients. So how should we think about the impact of the new enrollment criteria, especially in those patients who are [in-house]? And also can you talk about the powering for both studies with your new protocol?

Well, thank you. Cedric, you're in great demand today. So it's for you, too.

Thanks, Rudy. And if I understood your question because there was a little bit of kind of metallic sounds to your voice. But I think you were saying what to learn from the first 100 patients in that study, and how one should think about the next 200. What I will say is that, the most important outcomes for this study around the primary efficacy analysis, there are not changes in that regard. So basically, the amendments were aimed at reducing the amount of assessments, the amount of time that the patients were spending at the site in order to control for those issues that we saw, particularly placebo response. And so the primary outcome of interest, efficacy measurement has unchanged and the approach to dosing and evaluating the patients for the purpose of that is very much the same.

So with regards to learning from the 301 study, obviously, we can work to -- if one were to assume that maybe the beginning of 302 was similar to 301, obviously, there are ways that we feel confident having discussed it internally and with clinical trialists, design a more efficient second leg of this ongoing study, if you like, to bring us to a positive study. And so that's what we have set out to do by amending this protocol. And with regards to, at this point, powering a statistical analysis, we just would not be ready at this moment to get into those details.

Our next question is from Andrea Tan with Goldman Sachs.

Maybe another one for Cedric, if you don't mind. Just curious given the receptivity for [MDD] so far, just wondering if you could speak on updated thoughts on how you would see REL-1017 existing in the treatment landscape there? And are there any learnings that you can take from the early launch so far?

Hi, Andrea, thank you for the question. Cedric, that's definitely for you.

Well, I just -- I think it's tremendous to see new drugs being approved with new mechanisms of action. The MDD patient population continues to be underserved. And so I think it's terrific, the more opportunities we have for approvals, the better. And obviously, there are some similarities between REL-1017 being NMDA receptor antagonist. And I think it's very exciting for that particular realm of mechanisms that there's greater access and people are willing to develop these drugs. And no, I don't think I would -- I haven't really any learnings or insights based on early launch activity or anything like that. I focus on the clinical trial design here.

Andrea, if I may add, Sergio here. Yes, the position in the marketplace that you mentioned and REL-1017, if REL-1017 will be approved, it will be quite a bit different. The REL-1017 is going to be adjunctive. So it will be one single tablet that can be added to any other antidepressant use. And there is no antidepressant approved for that indication, right? The other drug is already a combination, so it's unlikely that would be widely used as an adjunctive to a third to the present. I hope this answers your question.

Our next question is from Andrew Tsai with Jefferies.

I appreciate you walking us through these analysis that you did. First question is, what would the very first 303 monotherapy study look if you were to do a similar set of post-talk analysis? Would you get a similar type of signal or a favorable signal for 1017? And then secondly, as we think about RELIANCE II, is there a way to know if the first 100 patients indeed are not tainted. There's no issues basically? Or said another way, why should we feel confident the first 30% of patients or so who have been enrolled in RELIANCE II won't hurt the study outcome because technically some of them could have come from unverifiable sources, correct?

Cedric?

Okay. Thanks, Andrew. So the first question about monotherapy, yes, we did. We did apply the same analysis to the monotherapy study, and again, in the monotherapy study, had a much higher mean change from baseline for placebo of about 14 points, and drug outperformed placebo by approximately 1 point. So it had a higher placebo problem, but the delta was also a little less than what we saw in the adjunctive, but you're right. When we looked at verifiable, unverifiable, pre-pandemic, post-pandemic and different splits of the data and sites, we definitely saw the same issues. So we don't feel that the issues were unique to the adjunctive 302 study, but rather broadly across the RELIANCE program. The decision to pursue adjunctive was a strategic decision really based on the fact that 302 was ongoing with, as you pointed out, 1/3 of patients enrolled. And by improving that design and starting with a new streamlined adjunctive study and new study, that will be the clearest and quickest path to filing for the indication of adjunctive treatment of MDD with the agency.

Now the question as to whether can you know anything from the first 100 subjects? Well, you can't really because it blinded. What you can work on is, you can look at how your studies did over time. And we spent a little bit of time pointing out the pre-pandemic or after the restrictions were lifted and the impact and how the delta improved. And so we do think that maybe the later part of the 301 study is more reflective of the early part of the first 100 patients that we have in 302.

And some other thoughts about sample sizing, gave us confidence to say, well, if we had an original target of about 300 patients, these trials -- the opportunity for the drug to separate despite all those challenges would exist. And so we've done a number of modeling exercises and talking to statisticians and talking to the clinical sites. And so yes, we -- to answer your question directly, we feel pretty confident that with the amended protocol and with the considerations around target sample size, this study could indeed be positive.

Andrew, also consider that the -- if you look at the data from the top down, the major impact on Study 301 was focalized, localized on 2 sites that enrolled about 40 patients together. These 2 sites that were not -- never been presence in Study 302.

Right, right. Okay. And then 1 more is just on the 304 study RELIANCE IV. Are there any differences in the study design relative to RELIANCE II, the ongoing one? And does it make sense to start a RELIANCE V, actually?

Well, let me start with RELIANCE IV before we talk about RELIANCE V. But with the 304 new study, it will be significantly different in terms of the various scales and assessments that we will -- we will be asking the raters and the PIs to administer with the patients. Now there are a couple of standard things that you don't change like your primary efficacy outcome measure. But again, it's much easier to start with a blank slate than it is to amend the protocol to kind of remove things. So it will be very similar in terms of 2-arm study, 4 weeks in duration, primary efficacy outcome, the same, and there will be less exploratory secondary endpoints just so that we can really focus in on the efficacy.

Our next question is from Jay Olson with Oppenheimer.

First question is for Cedric. Could you please talk about any due diligence that you did prior to making your decision to join Relmada? And what do you learn from your peers or KOLs that you may have spoken to about REL-1017? And what do you consider to be the most important capabilities for the Chief Medical Officer to optimize the probability of success for MDD clinical trials? And then I have a follow-on, if I could, please.

Thank you for that question. And I'm delighted to be part of the Relmada team. They're very thoughtful professional group of people. I've only been here since January 6, but I already feel part of the family. And when Sergio first reached out to me and asked would I be interested in taking the role, you're absolutely right. I did want to look at the data under CDA and understand what went wrong in the study and if I still believe that the drug had efficacy potential. And if it did, what could I reasonably come in and suggest be changed in order to optimize the signal. So it was very obvious in my mind, and the key opinion leaders and thought leaders that you mentioned that when I looked at the placebo response, one and all acknowledge that this was an uncontrolled placebo response, and it's very hard to draw any conclusions if you hadn't kept it to about 10 points, you really couldn't say one way or the other about the drug.

So then I wanted to look at the protocols as they were run and see if I had ideas coming into the design of the trial that I feel I could actually be of help or benefit to them. And so I think that by everything that we're trying to do right now, streamlining the protocols, I believe that can be achieved. And was that -- was there a second part to your question?

No, I think that's everything. That's super helpful. I did have 1 follow-up question on RELIANCE II when you see the results. How do you plan to evaluate patients who enrolled pre versus post protocol? And then, and is the study powered for a subgroup analysis of pre versus post protocol amendment? And what influence do you expect to see on the results on the protocol amendment.

(inaudible) do you want to answer that?

Well, the second part first, the effect on the results, I'm hoping to control for placebo response because I won't feel like I succeeded in my job unless I can bring placebo response down and that will -- that should widen the delta, the drug placebo difference because one thing that REL-1017 has had in common across all the trials is the same magnitude and trajectory of improvement. And so if we can keep placebo down, I would expect to see a nice separation. And the first part of the question related to -- remind me.

Evaluating patients pre versus post protocol.

Yes. I mean, we are definitely looking at that and intend to do that as part of the analysis plan, but the specifics of that, I just wouldn't be ready to get into detail of it just yet with you. But it's a great and important demarcation in terms of data announcement.

Jay, we did -- Sergio here. We did -- we made a conservative assumption on the first 1/3 of the patients. We assume that the data will be similar to what we have seen in 301. And we also made assumption conservative on what the next 2/3 of the trial patients should be to make the study successful and reach the conclusion that it's definitely worth to move forward and complete the trial.

We've reached the end of the question-and-answer session. I would now like to turn the call back to Sergio Traversa for closing comments.

Thank you very much. And in closing, I remain grateful to the Relmada team for their continued hard work and dedication to executing on our mission. I would like also to extend my sincere thanks to the participants and clinical partners involved in the REL-1017 trials for the effort in advance of this important product candidate through the clinic. With that said, thank you very much to everyone, and I wish to everyone a good end of the day. Thank you.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.