Relmada Therapeutics Inc (RLMD) 2020 Q4 法說會逐字稿

Greetings. Welcome to the Relmada Therapeutics, Inc. Fourth Quarter and Full Year 2020 Financial Results Conference Call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the call over to your host, Tim McCarthy. Please go ahead.

Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are 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 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 to Sergio. Sergio?

Thank you, Tim, and good afternoon to everyone. I'm very pleased to welcome you to Relmada's first ever earnings 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 host update calls on a quarterly basis.

The plan for today. Because this is our first earnings call and some of the people connected may not be very familiar with the company, I will 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. I will then turn the call over to Maged for his review of our financials. And after that, I will provide an update on our most recent accomplishment and review of 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 corporate evolution. The 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. that are affected by MDD, and they have limited safe and effective therapeutic option. A standard anti-depressant can take up to 4 to 6 weeks to show efficacy. And up to 65% of the patients do not respond or do not respond well to their first anti-depressant treatment. And there are about 30% of the patients that don't respond up to 4 different anti-depressant treatment.

REL-1017 has been developed as a new chemical entity which orally administers as a once daily pill. We have patent protection up to 2033, with additional patents filed that could extend exclusivity to 2038 and beyond. We have over 50 issued and filed patents for REL-1017 and Fast Track designation for the adjunctive treatment of MDD.

So based on the novel mechanism of action and the Phase II data that showed statistically significant, rapid and sustained anti-depressant effect with a favorable safety and tolerability profile, we do believe that REL-1017 has the potential to be the first FDA-approved anti-depressant for the adjunctive treatment of MDD.

In the Phase II study, REL-1017 achieved statistically significance compared to placebo, an all evaluated efficacy measure. Specifically, there was solid effects we observed on the MADRS 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 up to 1 from day 4 to day 14. The extended efficacy up to 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, psychotomimetic or opioid withdrawal symptoms.

In December last year, we initiated RELIANCE I, that is the first trial of our Phase III program of REL-1017 for the adjunctive treatment of depression. I will review the ongoing Phase III 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 financials. 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 period 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 million -- $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 -- excuse me, 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 a recent announcement, I mean, last week, I would like to start with an update on the Human Abuse Potential or HAP studies.

We recently announced that we early discontinued study 120, which was assessing REL-1017 liking versus oral ketamine as an active control. As a preplanned and blinded analysis of the initial study completed, were representing approximately 20% of the planned 40 patients 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 futility, we discontinued this study, and we will submit a new study design protocol to the FDA within the next months and proposing intravenous ketamine as an active comparator 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 controlled 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. (S)-methadone has been associated with any psychotomimetic hallucinogenic effect, and we are encouraged by the confirmatory effect 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 the DA determination of schedule. But they will also represent an important opportunity to add to the existing strong body of literature that clearly differentiate REL-1017 from methadone and any perceived association with dissociative symptoms or opioid effect.

I will now share the key aspect of RELIANCE, that is our Phase III program for REL-1017. The pivotal studies RELIANCE I and II consist of 2 sister, 2-arm placebo-controlled trial that include 364 patients per study across 55 sites. These studies will evaluate 25-milligram of REL-1017 and placebo on top of the patient's existing anti-depressant treatment. These are patients who have failed to respond to minimum 1 up to 3 previous courses of anti-depressant therapy in the current depression episode.

The primary endpoint of this trial is changing MADRS score at day 28. Key secondary endpoints include change in MADRS score at day 7 and CGIs score at day 20. We believe that our Phase III program is optimized to reduce the placebo effect risk. Based on the design, it's a 2-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 III trial, RELIANCE I, is enrolling 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 III trial, RELIANCE II, is a mirror study of RELIANCE I and is expected to begin immediately. Data from this trial top line are 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 include patients 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 options for the study design, and we will provide greater details when this is finalized.

As you have just heard, it is an extremely busy clinical development period at Relmada with several key data readouts over the next 3 to 15 months. Importantly, as Maged highlighted, we have a strong balance sheet, with enough cash to support us through all of these expected 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.

So operator, can you, please -- yes, can you please open up for questions?

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

Congrats on all the progress, guys. So maybe for those in the audience, help us understand, remind us at a high level. You have these 2 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 3 1017 doses versus the 2 comparators versus placebo? Just maybe talk us through that. And I have a follow-up.

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

Sure.

So very top down, these are not very complicated study -- 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 the 3 different doses of REL-1017, of (S)-methadone, so 25, 75 and 150 milligrams will have to be statistically different from the control. In this case, it's 40 milligrams of oxycodone and the ketamine study, ketamine IV in the 120 studies.

Here's really the 2 things that matters. One thing that I would like to clarify is a question that we have been asked for some time or frequently. (S)-methadone to be best schedule or non-schedule, it does not need to be same as placebo. It is an anti-depressant. 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 drugs, they are not placebo. And -- but the key point is that they have to be statistically significantly from control. I hope I answered your question.

Very clear, Sergio. And my second question is, I don't know if you thought this through, but for the oxycodone study that's reading on Q2, I guess, what would be some AEs of interest that would indicate euphoria, for example? And can we expect those AEs to be disclosed in the upcoming top line data beyond just likability scores? So basically, I'm just wondering, how are you thinking about sharing the top line results when it happens?

Well, it's a good question, Andrew. We'll decide when we see the data. But top line usually you receive really just very limited information that -- the one that matters. And then 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 vast score and the statistically significant. We have treated many patients with (S)-methadone now, and we know how the profile looks like pretty well. So we have Phase I, Phase II. So we are not expecting any surprise from the (S)-methadone profile.

Next question comes from Marc Goodman with Leerink.

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 near the same time line, right? Is that true?

Yes, Marc. Yes, it's absolutely true. Reason being that the oxycodone data is by far more -- they're both material. But the oxycodone is by far more important than...

Right. I'm just making sure that we will get that press release whenever it is in the second quarter. And then secondly, on oxy, the HAP study. So your view is that none of the doses can be relatively like oxy, right? I mean the 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 the [cause and decline] kind of trial. We have 13 patients treated with 150 in Phase I. None of them showed any opioid-like effect or oxycodone-like effect. We have 21 patients in the Phase II, that was the 50 milligram arm that is a loading dose, they took 100. None of them showed any opioid-like, oxycodone-like effect. And so the -- we do have enough evidence that the -- even the 150 does not have any -- even close to what the effect 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.

Yes, [you comment that]. This is evolving very quickly, so I don't have the exact number. Maged, do you know? We are getting close to all the site enrolled 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.

Next question from Joon Lee with Truist Securities.

Thanks for the update. So for the upcoming Human Abuse Potential study, has there been a similar preplanned analysis for the HAP study using oxycodone as an active comparator as what was done for the ketamine study? And if so, was oxycodone arm behaving as they should be based on the historic data? And 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.

Okay. So the first one is if the quality control -- 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 weird about data. And it's mostly done for safety. So -- and we have seen that with the oral ketamine, it was kind of also looking at utility that is like not very complicated to understand it. After 5 arms, there was no likability at all. And 1 of the 5 arms, even if it was blinded, but it has to be ketamine because they -- every patient takes every arm so -- and it was pretty straightforward that there was an issue with ketamine not behaving as a control -- a valuable control.

So we will do the -- we have not done it yet. And the oxycodone study started a couple of months after the ketamine study. The only reason being that the site that is doing, they need a little bit more time to get up and running. They were busy with other things, so we had to wait a couple of more months. So at some point, we'll do the analysis.

But if there is nothing notable, we will not even know it, that it happened. They only will notify us if it's something that will show that there is any unexpected effect or side effect or anything like it happen with ketamine that said, look, this thing doesn't look it's going the right direction.

So you were 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 that you won't know is there is no real issue with the study?

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

Right. And then like following up on Marc's question. If the 150 arm or any one of the dosing arms actually does not separate from the active comparator statistically, do you automatically get a Schedule II? Or what's the sort of the decision tree after that? I mean the ideal situation would be, as you described, none of the doses are likable. But if one of the doses happen to be likable, what's the process?

Yes, that's a great question, Joon. The -- there are -- we are not hiding the likability of -- the results of the study is important. But it's not the only factor that will determine the scheduling or on non-scheduling of (S)-methadone. There is a -- there are 8 factors that the FDA considers when they determine the recommendation for the DEA. 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 opioid, they are a lot more under scrutiny and the focus of the FDA, it's not because they're more abusable than ketamine or than alcohol or the pcp. And it's because they are dangerous, right? If you overdose an opioid, hey, you can have respiratory depression. And unfortunately, you can have some serious consequences.

If you overdose ketamine, and it happened, but you fell asleep or it's usually -- is an anesthetic, specifically because it does not give respiratory depression. So -- and the dangers or the potential risk is a very important factor in determining the schedule. That's why ketamine is Schedule III. Not because it's less abusable than oxycodone, it's because it's as dangerous than oxycodone. There are 8 of these factors. So likability 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, 1 of the doses of (S)-methadone will not separate statistically from 40-milligram of oxycodone, then it will depend on the FDA overall analysis and how they will consider the other factor -- consider that (S)-methadone in the past has been used -- not used, has been tested at 900 milligrams, and nothing happened. People did not like it, and nothing experienced any serious side effect. 900-milligram is 36x, I believe, is 9 x 4 is 36x the therapeutic dose. And so definitely we feel comfortable that safety is not the major potential risk for (S)-methadone. [We have to show in due course].

So it's not an automatic Schedule II? It's one of the (inaudible).

No. Correct.

Next question, Yatin Suneja with Guggenheim Securities.

This is Eddie on for Yatin. 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 these steps and how you're ensuring that you're not enrolling professional patients? And then what would be a placebo range for the MADRS improvement that would give you confidence that you had a proper screening process? And then I have a follow-up on the human study.

Okay. Let me take this one. So the -- how do we avoid -- we reduce the risk of having non-depressed patients in the Phase III in RELIANCE. So besides the 2 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. We have been advised by our adviser that the major risk in running a Phase III trial for depression is actually the patient selection because it's also connected with the placebo effect.

So we have multiple screening that the -- so this site, so like they screen the patient, and they propose that the patient meet the criteria to be enrolled in the study. Then we have the CRO that themselves, they will review the data and they will evaluate if there is any risk of having this patient is -- may not be depressed, may have some other issue or it maybe a personality disorder.

The data also seen by, I believe, our CMO. And the -- for the safety control. And clearly, there is an opinion here. There is probably the most important of the steps beyond these 3 steps is the review done by a group. Maged, can I say the name? Yes, it's nothing. CT&I is a group that was -- I mean it was not from MGH or Harvard. And what they do, they rediagnose the patient.

So only the site and CT&I, they have a contact directly with the patients. So it's a phone interview, and they administer a different scale. So it's not Hamilton, it's not MADRS. They administer a scale that's safer, that is considered more the patient as an entity, right? For example, they look at the history of the patient that's 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 4 different ways of which the one -- the last one, the CT&I, it's -- we do believe it's effective. We use it in Phase II, and we have seen the results. It was pretty well done, pretty effective in a way. I hope I answered.

Yes, that's great. 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 comparator if they're getting oral versus IV drugs?

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

Next question, Jay Olson with Oppenheimer.

Congrats on the progress. I was curious about the start-up activities that remain to be completed before initiating the RELIANCE II second pivotal trial and also the Phase II monotherapy trial and whether or not you expect to initiate the Phase II monotherapy trial before or after RELIANCE II starts.

Yes. Maged is really helpful in looking at the operation in its entirety. Maged, do you want to take this? You're very close to...

Sure. Thanks, Sergio. And thank you, Jay, for the question. So with regard to RELIANCE II, I can safely say that we're 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 II monotherapy trial, what remains to be done before you can initiate that study? And should we expect that before or after RELIANCE II initiates?

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 we have also selected a CRO. So I think a lot of the pieces are coming together. But our expectation remains that we'll start that study by the end of the first half.

Okay. Great. And are there any details about the study design for the monotherapy study that you could share with us?

I think we're not quite prepared to do that yet. So give us some time and we'll be able to give you a more full characterization of the study. You can expect it to be very similar to the RELIANCE I and RELIANCE II studies in that it will be 2 arms, placebo versus 25 milligrams of REL-1017 de novo patients. But beyond that, we're not ready to disclose number of sites and such and any limitations on patient selection.

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

(Operator Instructions) Our next question comes from Salveen Richter with Goldman Sachs.

This is Andrea on for Salveen. Sergio, maybe a question for you just based off with 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 oxy?

Well, Andrea, thanks for the question. Well, yes, with the limited -- that is a limitation that was a blinded analysis, so we don't know who stay -- who took what, but they all took all arms. So we have seen no evidence of dissociation, hallucination, delirium and out of body experience in any of the patient that's been reviewed, that was 20% of the planned total. So clearly, (S)-methadone did not show anything because even blinded, there was no sign of this in any of the (inaudible). 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 I and in Phase II.

And clearly, we have to prove it, but we see it a little bit like unlikely that a drug will behave differently into similar study just with a different control arm. So I mean if nobody liked it or nobody has experienced anything that could be likable in the ketamine study, it's always possible, but we see it as unlikely that will change total behavior. So yes, the answer is yes. Gave us -- supported the confidence that we have that (S)-methadone is not a likeable compound.

I would like to turn the floor over to Sergio for closing comments.

Okay. Well, thank you, operator. And thank you all of you for joining our call today. It was our first one, so it will be remember. But we look forward to the year ahead. And we'll provide further update in -- throughout 2021. So thank you all again, and 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.