Relmada Therapeutics Inc (RLMD) 2021 Q3 法說會逐字稿

Greetings, and welcome to Relmada Therapeutics, Inc. Third Quarter 2021 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, 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 Accounting and Compliance Officer, Chuck Ence. This afternoon, Relmada issued a news release providing a business update and announcing financial results for the 3 and 9 months ended September 30, 2021, and filed its quarterly report on Form 10-Q with the SEC.

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 the company's SEC filings included -- including in the annual report on Form 10-K for the year ended December 30, 2020, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, November 11, 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 to Sergio. Sergio?

Thank you, Tim, and good afternoon to everyone. And we also have on the call today, Maged Shenouda, that is our CFO, on top of Chuck Ence. And I'm pleased to welcome you to Relmada third quarter 2021 conference call. On today's call, I will provide an update on the comprehensive development program for our lead product candidate, REL-1017, for the adjunctive and monotherapy treatment of major depression disorder or MDD; highlight the substantial market opportunity for this compelling product candidate; and review upcoming milestones. Following this, I will turn the call over to Maged Shenouda, Chief Financial Officer, for a review of the financials. I will then provide a brief overview of the data that we recently presented at the Neuroscience Education Institute Congress last week.

With that, I will begin by highlighting the point that we will have data readouts in each quarter over the next year. I will elaborate further on this shortly, but in summary, in the first quarter of next year, 2022, we expect top line results from our second human abuse potential or HAP study, this one assessing REL-1017 versus intravenous ketamine. Following this, in the second quarter, we anticipate top line data from RELIANCE III, the ongoing monotherapy registrational Phase III trial. In the third and fourth quarter of 2022, we expect top line results from RELIANCE I and RELIANCE II, respectively, the 2 ongoing Phase III sister 2-arm, placebo-controlled pivotal studies.

With that, I would like now to reiterate the important development and regulatory update that we provided for REL-1017 last month. To begin with the RELIANCE III, which aims to randomize 364 patients, is expected to be completed in the second quarter of 2022, prior to the anticipated conclusion of RELIANCE I and RELIANCE II -- the adjunctive MDD studies, which I will discuss momentarily. This MDD monotherapy study is for individuals who are diagnosed with depression and are not currently taking standard antidepressant therapy. Importantly, conducting RELIANCE III as a Phase III study may meaningfully reduce the time for a potential approval of REL-1017 as an MDD monotherapy.

In addition, in order to support potential regulatory submission seeking approval for REL-1017 as a monotherapy as well as adjunctive treatment, the FDA confirmed that based on what is known at this time, Relmada will not be required to conduct a 2-year carcinogenicity study of REL-1017 with an understanding that sufficient preclinical safety data has been generated to date. The FDA also confirmed that Relmada does not need to conduct a TQT cardiac study in humans to support cardiac safety in a potential regulatory solution for REL-1017, as the data provided to date as well as the data to be generated from the Phase III program will be adequate to evaluate and confirm the cardiac safety profile of REL-1017.

Moving on, I will now provide an update on the ongoing RELIANCE I and RELIANCE II studies, each of which would include 364 participants per study across 55 sites as well per study. As a reminder, RELIANCE I and II are designed to evaluate REL-1017 as an adjunctive treatment for MDD, and both include 2 arms, placebo and 25 milligrams of REL-1017, both of which are in addition to a standard antidepressant treatment for participants who have had an inadequate response to a minimum of 1 and up to 3 standard antidepressant therapy. The clinical trial protocol remains unchanged, with the primary endpoint being changing MADRS score at day 28 and key secondary endpoints include the change in MADRS score at day 7 and the change in the clinical global impression severity score at day 28, the CGIS. Both RELIANCE I and RELIANCE II are progressing with top line data expected in the second half of next year.

The RELIANCE development program also includes RELIANCE-OLS, a long-term open-label safety study that is enrolling both rollover participants from all 3 pivotal studies as well as de novo participants. RELIANCE-OLS is ongoing and enrolling participants as well. Data from this long-term open-label safety study will be part of the NDA filing package. As we look ahead to the key RELIANCE clinical development program, the catalyst I outlined here, it is important to know that we are highly confident that we have more than sufficiently powered our studies to demonstrate the desired effect and targeted decrease in MADRS score improvement. Of significant, while REL-1017 demonstrated an 8 point improving score to placebo in the Phase II trial.

Moving on, our second HAP study evaluating REL-1017 versus intravenous ketamine, which has an established history as an effective positive control, is ongoing. Based on the current rate of recruitment, we expect top line results from this study in the first quarter of 2022. As a reminder, in the third quarter, we announced positive top line results from our first half study, evaluating REL-1017 versus oxycodone 40 milligrams as an active control. As we discussed this data at length on our last 2 investor calls, I won't go into too much detail here. However, I will reiterate that this study was designed in a manner that followed the FDA 2017 guidance on the assessment of the abuse potential of drug. Top line results for the primary endpoint showed that all 3 doses of REL-1017 evaluated in recreational opioid users demonstrated a highly statistically significant difference versus the active control drug oxycodone 40 milligrams.

Notably, the highly statistically significant difference was confirmed between the active control and 150 milligrams of REL-1017, which is the maximum tolerated dose and 6x the proposed therapeutic dose. Other secondary endpoints such as desire of taking the drug again, were consistent with those of the primary endpoint, demonstrated no evidence of any meaningful abuse potential. Importantly, these results are consistent with HAP study results that been seen in other drugs that affect the CNS and which have been scheduled at Classes 4, 5 or even unscheduled.

I also wanted to take a moment to reaffirm the need for a new therapeutic option with the potential clinical profile than REL-1017 presents. Over 17 million individuals in the U.S. suffer from MDD, and the current option are limited in their ability to help these [patients]. Current antidepressant standards have significant side effects and can take up to 4 to 6 weeks to show efficacy. 65% of patients do not respond to their first antidepressant treatment and 30% do not respond to any of the current available oral treatments.

Furthermore, the only 3 FDA-approved adjunctive treatment for major depression disorder, all of which are antipsychotic, which often can cause long-term serious side effects. It is evident that new treatment options are needed, and we believe the REL-1017 has the potential to make a difference for these patients and their caregivers as a monotherapy or adjunctive treatment.

I will now pass the call over to Maged for his review of financials. I will then touch on the recent poster presentation at the recently held Neuroscience Education Institute Congress. Please go ahead, Maged.

Sure. Thank you, Sergio, and good afternoon, everyone. Today, we issued a press release announcing our business and financial results for the 3 months and 9 months ended September 30, 2021, which I will now review. For the third quarter ended September 30, 2021, total research and development expense was approximately $34 million as compared to $11.2 million for the comparable period of 2020. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL-1017.

Total general and administrative expense for the third quarter ended September 30, 2021, was approximately $8.7 million as compared to $5.9 million for the comparable period of 2020. The increase was primarily due to an increase in personnel costs, stock-based compensation and consulting services. For the third quarter ended September 30, 2021, we recorded a net loss of approximately $42.6 million or $2.44 per basic and diluted shares -- and diluted share compared to a net loss of $16.9 million or $1.05 per basic and diluted share in the comparable period of 2020.

Turning to the results for the 9 months ended September 30, 2021, total research and development expense was approximately $65.3 million as compared to $21.1 million for the comparable period of 2020. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL-1017. For the 9 months ended September 30, 2021, general and administrative expense was approximately $26.2 million as compared to $18.8 million for the comparable period of 2020. The increase was primarily due to increase in personnel costs, stock-based compensation and consulting services. For the 9 months ended September 30, 2021, we recorded a net loss of approximately $91.4 million or $5.36 per basic and diluted share compared to a net loss of $38.7 million or $2.52 per basic and diluted share in the comparable period of 2020. On September 30, 2021, the company had cash and cash equivalents and short-term investments of $88.1 million, which compares to $117.1 million on December 31, 2020.

I'll now hand the call back over to Sergio for further remarks on our most recent progress. Sergio?

Thank you, Maged. Earlier this month, meaning last week, we presented a total of 8 posters at the NEI Congress, including 3 posters with new data sets resulting from post hoc analysis from our Phase II trial. First, the post hoc analysis of the symptom of depression questioner, the SDQ, total and subscale scores from patients treated with REL-1017 showed improvement in subscales of cognition, motivation, anxiety, irritability and sleep function, signaling that benefits from REL-1017 extend well beyond just mood improvement. These data suggests that REL-1017 may have potentially meaningful implication for patients working and social ability.

The second poster included a post hoc analysis of a subset of MDD patients' experiences dissociative symptoms prior to treatment showed a clinically meaningful improvement in the clinical administered dissociative state scale scores, which is used to measure dissociative space after REL-1017 treatment. This suggests that REL-1017 may not only be exempt from generating dissociative symptoms such as other NMDA antagonists, but it may actually be beneficial in patients affected by such symptoms. Finally, while some of the current standard-of-care antidepressant has shown an increasing lipid metabolism abnormalities which put patients with MDD at risk. A post hoc analysis showed that REL-1017 did not significantly alter lipids, potentially lacking an cardiovascular risk.

In summary, REL-1017 development program remains on track and we expect key data catalysts in each quarter next year. To reiterate, we expect top line results from the second half study -- this one assessing REL-1017 versus intravenous ketamine in the first quarter, followed by top line data from the RELIANCE III monotherapy trial in the second quarter. In the third and fourth quarters of 2022, we expect top line results from the RELIANCE I and RELIANCE II adjunctive trial, respectively. Importantly, as Maged noted, our robust R&D initiatives are supported by a strong balance sheet.

In closing, I remain grateful to the Relmada team for their continued hard work and dedication to executing on our mission. I would also like to extend my sincere thanks to the participants and clinical partners involved in the REL-1017 clinical trials for their effort in advancing this important therapy through the clinic as expeditiously as possible.

I believe we will now open up the call for questions. And operator, can you please open up?

(Operator Instructions) Our first question is from Andrew Tsai with Jefferies.

I noticed that the NEI Congress, I noticed you also shared some additional secondary endpoints for the oxycodone abuse liability study. I couldn't help but notice while the means increased a little for s-methadone on the secondary endpoints, the scores, but that the median stayed at 50. So I thought that was interesting. I was wondering if you can kind of talk about that. But at the same time, I just felt like there -- I guess, it's part of my second question is, like, did you ever find out who -- what the outliers were, who scored high? What exactly high in terms of the VAS score? And I guess, what were they exactly feeling to make them score higher? And then can you confirm that they were definitely not feeling euphoric mood or anything like that, but maybe it's because of CNS effects?

Look, on the data that we presented at the NEI last week, the old data set is out for publication at some point and will be published. So all the details would be there. I would just summarize that there is very marginal difference between primary and secondary endpoint. They are -- we can say they are very, very consistent, and they confirm that there is a slight difference from placebo that is totally expected from any CNS drug that affect the mood, especially at the massive dose of 6x the therapeutic dose. But none of these data are inconsistent with the primary endpoint. It's just a confirmation.

On your second question, on the, the straight answer is the -- well, no, we did not reach out or we cannot reach out to the subjects after they complete the study. We don't really know who they are at all. It's all in the hands of the site for respect of privacy. There are some question that has been asked in the various questionnaire, unlimited questionnaire in the study. And the -- we did look at the outlier or without knowing who they are or why they were outlier. But what we have noticed is that the vast majority, I mean, there are really a single-digit number of outliers.

So it was not, how can I say, was not an extensive likability scores across the different set of subject. There was only -- I don't remember the exact number, but it was a single-digit number of patients that, for whatever reason, they score high. That -- we see that as a positive signal, because although we cannot confirm, we don't have -- this study was not designed to detect to show any antidepressant effect. But with over 90% of the subjects totally not feeling any likability and only a single-digit number of subjects liking the drug significantly, we can -- we suspect that there was something in these patients that made them and these subjects that made them like, in particular. That, we can speculate that could have been that they were in a depressed state or had withdrawal symptoms from anxiety and psychiatry psychological without symptoms and taking a massive dose of a rapid-acting antidepressant that may have felt some benefit. So I hope I answered your question.

It is.

Look, the Phase III we will answer all these questions extensively, and we look forward to the ketamine data.

Right. And speaking of the Phase III studies, I did have one hypothetical question is the first Phase III monotherapy depression data in Q2. So hypothetically, if it happened to show mixed data on efficacy, let's just say, it doesn't hit day 28 or maybe it doesn't show rapid effects. I guess the question would be then, why should that not be a negative rate read to your Phase III adjunctive studies?

Well, first, we hope that the data will confirm what we have seen in Phase II. The only way that that could happen, look we know the drug in Phase II, the data is real. So there is no doubt, I think it's a very, very strong efficacy signal. So if that signal is not confirmed or repeated in monotherapy, the only or potentially one reason could be that there is some form of synergy between current and existing treatment, even if it failed to show efficacy, in adding an NMDA. So I would not read that if it by chance it doesn't work well as a monotherapy that we can say that the -- this adjunctive treatment would not work as well. And there may be some reason that -- if you ask me directly, we don't believe that that's the case. But the message is that I would not correlate the monotherapy directly to the adjunctive treatment because there is a difference adjunctive to taking 2 drugs versus 1 in the monotherapy. But to be honest, I do believe that that's not going to be the case.

Last question very quickly, is just for the monotherapy study, can you remind us the primary endpoint day 28, I guess what kind of minimum separation versus placebo on MADRS, which would be the minimum that you would like to see? And are these assumptions then similar to the Phase III adjunct MDD studies? So can you just remind us one more time?

This one, I can give you a more straight answer. The statistical plan is the same, exactly the same for all the 3 Phase III, the 2 adjunctive of the monotherapy. And it is designed to detect a delta of 2 points in the MADRS score versus placebo. So if we hit 2 points' delta, the study will be statistically significant. That's the way the statistic has been designed for all the 3 studies.

Now the original 2 points -- because the rule of thumb, it's not like it's not in the FDA guidance, of course, but rule of thumb is that looking at all the approved products, 2 points as a monotherapy or even adjunctive is a clinically meaningful delta that potentially could get you an approval.

There are a lot of other factors in the approval. But in terms of like efficacy, I believe it was Professor [Saul] that was published that 2 points delta is clinically meaningful, that therefore it should be -- it should deserve everything staying the same, it should deserve an approval. For treatment-resistant therapy or depression that is not something that we are doing or we are looking at, 1.5 point becomes the correspondent number for potentially getting an approval. And so consider that in Phase III, we had 8 points' delta. So we left a lot of room and we wanted to be conservative. We know that Phase III, there is more variability, more patients, more sites. So we'll have some room for some -- if something doesn't go the way we like it. But if we show 1/4 of the efficacy that we have seen in Phase II, it still -- would still be statistically significant.

Our next question is from Yatin Suneja with Guggenheim Partners.

Just a couple of for me. With regard to the RADIANCE III, which has now been upgraded to Phase III, can you just help us understand like what exactly was the conversation with the FDA? And then in terms of -- that led to it being Phase III because earlier you were thinking about a Phase II? And then how is your filing strategy going to be? Are you going to complete all 3 studies and then file? Just trying to get a sense of the type of label you are hoping to get. So that's a couple of questions on the RELIANCE. And then one question on the ketamine study that you're doing. Can you just help us understand what you are doing differently in this study to make sure you do get a separation between ketamine and the placebo arm, which did not happen in the first study?

So the first question was what has changed that we are -- the monotherapy study has become a filing or a pivotal study. Well, the -- we did not actually have a conversation with the FDA in the sense that we sent the proposal of make it Phase III and we waited the traditional 30 plus 30, so the 60 days that usually signal that the FDA does not have anything in opposed for moving ahead with the program, and that's what we did. So we waited until in end of August, in August. And then we didn't hear anything against from the FDA. So we make it the Phase III.

There was real not a lot of difference. The product was exactly the same. So it's not -- there was no change in the problem. The question is that what has changed that make up thing to do a Phase III instead of a Phase II. Two things: one was the feedback from the FDA on the 2-year carcinogenicity study and the TQT. That shows that the FDA is somewhat comfortable with the safety and tolerability of the drug. And then the abuse, the HAP study in July that we do believe could have been an issue with the FDA to expand a trial to like 350 patients, all outpatients.

So we put together all these data. And we took some risk that the FDA could have said, well, you don't have any efficacy data as a monotherapy. Safety, we are now relatively comfortable or comfortable, but there is no single data that shows that the drug has any efficacy in monotherapy, although we do believe that it's not very different from [Exampelin]. And so that was the reason that we, initially, we thought about Phase II and then a Phase III. Then we saw the FDA relatively comfortable. We had the abuse data that they we have perceived as they are, very positive and took some little risk, but it worked. And so that's why we moved to -- we make it becoming a Phase III filing study. The second question was...

It was on the ketamine, like the differences between the first study and this study to make sure that this time, the ketamine and the placebo arm are separate?

No, that's easy. The first failed or unsuccessful ketamine was -- the reason was that oral ketamine, the bioavailability is very poor and it did not work as a control; we had almost half of the patients, they were taking oral ketamine, we thought they were taking placebo in the qualification part of the study. So they were not -- that didn't work. And now we are using an intravenous ketamine that is we kind of look at what Johnson & Johnson has done with esketamine which Spravato. So I believe it's 50 milligrams' infusion over 40 minutes, that kind of the standard. And that definitely works as a control. So if -- there is no doubt that the control will work. And the study has been progressing nicely. Looking forward to data in Q1. Yes. On the regulatory, correct?

Look, we are fast track. So we are planning to do a rolling NDA. Usually rolling NDA, you filed the kind of standard the CMC, probably we will file the old preclinical package. We haven't really decided the final studies for the Phase III, but I do believe that the -- if they are not too far away one from the other, probably were to file the model for the Phase III and the efficacy study together. And clearly, if there is like month 1 and the other, then maybe we will file whatever we have available and not wait for the lines 2 and 3. It's a bit too early. But the plan is to do enrolling NDA. So we want the FDA to have enough time to review the more standard CMC and preclinical, so if there is anything that they would like us to do more, we will have time. We won't delay the NDA -- the final NDA.

Maybe one question for Maged. Can you maybe help us with the P&L? I mean, so steep rise in R&D, just trying to get a sense how much was non-cash there and then how should we model second half of this year and the next -- this -- versus 4Q and the next year?

With regard to non-cash components of R&D for the quarter, that was $11.8 million for the R&D line and $6.4 million for the SG&A line. And with regard to just the remainder of the year, I would say -- I'd point you to our 10-Q, which we expect to file tomorrow morning. And certainly, we're not giving guidance, but if the question relates to expenses going forward and sort of our ability to meet that, we believe we have sufficient funding to continue with ongoing operations for at least 12 months.

Our next question comes from Joon Lee with Truist Securities.

I wouldn't have thought to ask this question, except the fact that it's come up for another company that just reported data from the TRD study. And given your Phase II also included TRD patients, I thought I'd ask, did you see any suicidal ideation in your trial as an SAE? And I have a follow-on.

I knew that this next question could have or would have come up. So look, we don't -- of course we look at the data, and that has been released 2 days ago. We only know what was in the press release, nothing more than that. And so the straight answer is that, no, we have not seen any suicidal ideation in any of our study. We do believe that an NMDA antagonist, they actually -- they're supposed to reduce the suicidal ideation. If not -- if you look at there is another, for our competitor that is working on a nasal form of ketamine and they are running the trial as a suicidality ideation reduction.

So NMDA antagonists, they are specifically -- they are supposed to be specifically indicated for reducing the risk of suicide. Now the program that showed is a side effect, an increase in suicidality, look, it's -- when you -- it is a 5 H2A agonist, right? And if you remember, and I do because I was -- I spent 6 year on the development and launch of Prozac, fluoxetine, (inaudible) And the issue, one of the -- there's a black box -- of serotonin, is suicidality. So it's a totally different mechanism of action.

Look, it's all speculative; I really don't know. It's 5 H2A versus VPA. It's all speculative. But if there is an explanation, this could be one. With that said, we're looking to -- we spoke with a few specialists. When you take such a high dose of psilocybin -- and these are not drug abusers, right? These are patients with depression. So they don't want to have the -- to call it like the [psychotomimetic] trip, right, it's not something that they enjoy. If you are heavily depressed and you have treatment-resistant depression, you take a massive dose upside of psilocybin, for more than a few minutes, you are totally confused. That's why it's an in-clinic treatment. So if you are depressed, and you are in the start of confusion, you may mention suicidality, but I would not read too much into that. It momentarily, and I believe it was just on visual right after or during the acute phase. So it's way too early to speculate.

I mean, but your Phase II was also in patient monitored for 2 weeks, but you saw no suicidality in spite of being an inpatient study?

We have seen nothing, no. No. No issues with suicidality. We don't expect to.

And then this follow-up question is, I was really intrigued by the poster showing symptom improvement using the SDQ scale which was not stat sig, I believe, at day 7, which was the last day of dosing, but became stat sig 7 days later, what is the significance of SDQ within physician circles versus academic circles? And how was it used? And why do you think it separated like 7 days later as opposed to the last day of dosing during the trial period -- during the dosing period?

I answer the first question first, sorry, the second question first. The patient is slower to react, in the self-administered questionnaire. And then when he's asked questions from the clinicians and so the MADRS and CGI, they are a lot quicker to detect a signal. The patient needs a little bit more time; they had time to go home and they realized when they went home without taking anything there, they were actually feeling better. And in terms of depression symptoms, and they reported when they came in at day 14 at the control. So it's not -- it's pretty usual that there is a slower response from the SDQ compared to MADRS and CGI, just because it's patient-reported. And so that's what we believe is the reason that the day 14 was better than the day 7. The patient had to -- needed some time to get used to not having depression symptoms before they were reporting that. And sorry, remind me the first question.

How is it used by the physicians, the SDQ? Or is it purely an academic metric that's used?

Well, I believe it was published and invented by eminent academic. So the -- I don't know what -- look, the FDA most likely. They look at everything, right, based on all the previous antidepressant approved. It means something, but it's only a support for the MADRS. From our conversation with the FDA I do believe -- Maged, correct me if I'm wrong, but I do believe that they consider the CGI and MADRS somewhat similar.

Yes.

So we try to split it into different endpoints. And I think that to us, I said, well, you don't -- if you are okay with the MADRS, of course, you would be okay with the CGI, right? So don't blame me. I mean we're not blaming, but the -- they are strictly correlated. SDQ is not strictly correlated. So it has some meaning, and you have to be good results on the MADRS.

Our next question is from Andrea Tan with Goldman Sachs.

Sergio, the first one, just a follow-up on your comments on the plans for the rolling NDA submission. Would positive results from RELIANCE III support approval for monotherapy use or would you need to run a second trial to secure that indication?

That's a good question. The -- if -- that's our opinion, the FDA never commented on it. If all the 3 studies are positive, we do believe that one monotherapy study would be enough to get an indication on the label. If it would be the only positive study, then I don't think that it's going to work, right? So we will have to run at least another one as a monotherapy. Okay. That's our current thinking.

And then just wondering if you could comment on what you're seeing with enrollment in the RELIANCE I and II trials, that's delaying the timing of those readouts. And in particular, do you see this in any way reflecting commercial dynamics that could play out if REL-1017 were approved?

You mean why it takes a little longer to complete the adjunctive? Look, this most simple answer is the quality of the trial. We have a lot of, lot of -- we paid a lot of attention on the quality of -- we really want the patients to be surprised. And so that -- there is a pretty high selection of the patient, meaning not selection that we don't know which patient will respond or not. But definitely, we want to be sure that the patient is depressed, does not have personality disorder or does not have anything that would not be an appropriate patient for an antidepressant treatment. And the failure rate from screening is about 50%. So one of the 2 patients is not enrolled because he does not qualify.

So we are very stringent inclusion and exclusion criteria, mostly focused on safety, of course, but focus also on being sure that we don't enroll everybody. Enrolling is very easy. If you want just to complete the study, you can do it very, very quickly, but that's not what we want to do. We want a study that would reflect the effect of the program, of the drug, and that it takes a little bit more time. The monotherapy is supposed to be a lot faster. We just started now in September. So we'll see what the ramp-up is. But not -- the inclusion and exclusion criteria are the same as an adjunctive, but the patient selection is -- there is more patients who are rejected.

Our next question comes from Jay Olson with Oppenheimer.

Congrats on the progress. Maybe just a follow-up on the recent competitors' results in TRD. Do you see any read-across from that COMPASS pathway study for psilocybin and TRD, to your own psilocybin program from Arbormentis and can you maybe give us an update on the current status of that compound?

Sure, the first question, if there is any correlation, the straight answer is no. The base of our program on psilocybin is totally different from pretty much every other competitor that works on psilocybin. We are not doing anything regarding psychiatry. And so, no, depression is neurodegenerative diseases and we want to leverage our expertise on the neuroplastic effect in PDNF; and 5 H2A agonist at the end of the cascade, pretty much results in a similar neuroplastic effect similar to an NMDA antagonist. So we want to leverage what we understand of that science in neurodegenerative diseases. And we use an enormously lower dose compared to the competition that works on psychiatry. And the base of that is that we -- our scientists, I say we but it's actually our scientists -- we do not believe that you need to get high or to get like a psychotomimetic or whatever effect to have a neuroplastic or neuroplastogenic effect.

So we go for much lower dose for a chronic treatment and not in psychiatry, in neurodegenerative diseases. So the straight answer is no, there's no correlation between what the other companies are doing and what we do. The fact is, we're working in manufacturing. Meaning it would not -- it is not the easiest compound to produce synthetically. And I don't know, Maged, shut me up if I talk too much, but actually, we have designed and generated our own proprietary synthesis with the prism chemist. And so we are going through the manufacturing right now and dealing with the FDA.

Of course, the psilocybin, the program we are working on is 2 sets of -- is in 2 parts, right? One is psilocybin, the molecule. That one we would like if the FDA agrees, especially because we use very low dose compared to the other players, we would like to leverage all the safety data -- there is pretty sizable package of safety for psilocybin, especially at low dose. And so definitely if the FDA agrees, then theoretically and the manufacturing will be completed, then theoretically, we can go straight in Phase II sometime, probably in the second half of next year.

Honestly, we are very busy with this massive Phase III program of REL-1017 so -- and then psilocybin is going, but it is not an extraction program. The real focus is REL-1017. It would be the focus after the Phase III data, then we will focus on psilocybin as well. But the plan is to be able to do things to start the Phase II sometime in the second half of next year when manufacturing will be done. And the FDA -- if the FDA will agree it's going to skip the whether preclinical and Phase I, as we do believe.

And the second part of the program is derivatives of psilocybin is a new chemical entity. So that is full-fledged development. So we will start -- we are synthesizing now, but we will start from in-vitro. And I believe we are doing some animal studies now. But it's very -- it's a lot earlier than the psilocybin as a psilocybin molecule. I hope that answers you.

And maybe just one follow-up. Can you comment on what particular forms of neurodegeneration that you're thinking about studying when you initiate your Phase II trials?

Let me try without -- yes, so we are focusing on diseases where there is a damage of the nerves, of some nerves. I would say acute damage. So -- and if we are right, and psilocybin is very safe and especially at the doses that we're using, potentially it could speed up the recovery of the -- or limit the damage of the nerve, or speed up the recovery, if there is a way to measure the recovery. I would not say more than that. Also because we have been -- we are discussing a bit that we will discuss with the FDA. We want to be sure that they are in agreement on what we want to do. But that's pretty much would be the plan. So more acute nerve injury and attempting to improve the -- reduce the damage and/or improve the recovery. It would be more than one indication, of course. Acute nerve damage, it can be generated -- it can happen for a variety of reasons.

So spinal cord injury or stroke.

Spinal cord injury-- I've been involved 25 years ago, we'll never get close to that. And as -- not spinal cord injury.

Thank you. Ladies and gentlemen, there are no further questions at this time. I'd like to turn the call back to Sergio Traversa for any closing remarks.

Thank you, operator. And well thank all of you for joining us on the call today. We are pleased to share our recent progress with you and as REL-1017 clinical development program continue to advance, we are excited about the many important catalysts that lie ahead of us in 2022, and we'll keep you updated on clinical readouts and activities in the coming months. Next year is really -- will be the -- where we will know if we have a drug or not. And we do believe -- I do believe that we do have a drug, and it potentially can be a very good drug, helping a lot of people. Thank you all again for joining on the call, and enjoy the rest of your day. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you very much for your participation.