Relmada Therapeutics Q4 2023 Earnings Call Transcript

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March 19, 2024

There are 9 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Romana Therapeutics Inc. 4th Quarter and Full Year 20 22 Results Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Tuesday, March 19, 2024.

Operator

I would now like to turn the conference over to Mr. Tim McCarthy. Thank you. Please go ahead.

Speaker 1

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 Financial Officer, Magad Chanuda. This afternoon, Ramada issued a press release providing a business update announcing financial results for the 3 12 months ended December 31, 2023. Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that during this call, Ramada's management team will be making forward looking statements.

Speaker 1

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 Ramada's press release issued today and the company's SEC filings, including in the annual report on Form 10 ks for the year ended December 31, 2023 and subsequent filings. This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast, March 19, 2024. Ramada 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.

Speaker 1

Sergio?

Speaker 2

Thank you, team, as always, and good afternoon to everyone, and welcome to the RALMADA 4th quarter and full year 2023 conference call. We are continuing to make solid progress in advance in the ongoing Phase III program for rel1017 in major depressive disorder, MDD, as well as in the promising preclinical novel psilocybin program, all of which I will briefly cover today. Following this, Magid will review of our 4th quarter and full year 2023 financial results, and then we will take your questions. Let's begin with an update on the Phase III program for rel=ten seventeen. As you know, RENATA is focused on developing rel1017 as an adjunctive treatment for MDD.

Speaker 2

As previously communicated, we have made critical changes to RELIANCE 2, the ongoing Study 302, a Phase III, 2 arm, placebo controlled pivotal study evaluating retent-seventeen, 25 milligrams for adjunctive MDD aimed at controlling placebo response and improving the enrollment quality. The amendment study 302 protocol has been implemented across all our clinical sites. Enrollment continues to steady progress and our ability to leverage our close relationship with the study sites is paying dividends. Moreover, the ongoing initiative we put in place to drive trial awareness with prospective patients are also bearing fruits. Importantly, we are evaluating the productivity of sites on a real time basis and making changes where needed.

Speaker 2

As a reminder, we plan to enroll approximately 300 patients into Reliance 2. Based on our current projection, we expect the involvement into RELIANCE 2 to be completed in mid-twenty 24. In our second Phase III trial for rel=ten seventeen named RELITE or Study 304, we began dosing patients during the Q3 of last year. Reliance also has a planned enrollment of approximately 300 patients that is planned to be completed by year end 2024. To reiterate what we have said previously, like RELIAZ-two, RELIAZ is a randomized, double blind, placebo controlled 4 week trial evaluating the efficacy and safety of rel=ten seventeen as an adjunctive treatment for MDD in patients experiencing inadequate response to ongoing background antidepressant treatment.

Speaker 2

The primary endpoint of both studies is the same, is the change in the MATRAS total score from baseline to day 28 as compared to placebo. I should highlight that we made significant changes to our screening and enrollment processes in order to ensure that we have patients that meet all the quality criteria. More specifically, we have instituted a comprehensive adjudication process through which we now require medical records for all patients enrolled in RAYANCE II and RELINE. Given this, our strain failure rate in these studies is now approximately 80% versus 50% previously in RELIANCE 1 and RELIANCE 3, our previously completed Phase III trial for rel=ten seventeen. We strongly believe that these changes will significantly enhance the probability of success of our current studies.

Speaker 2

Of note, we have completed all the necessary preclinical manufacturing and Phase 1 studies required for a potential rel1017 NDA filing and are now focused on execution of various pre commercial readiness activities. Moving now to our promising preclinical novel, modified release, silo typing program. You may recall that at last November AASLD meeting, delivered conference, compelling preclinical data were presented in a poster presentation. These data demonstrated the beneficial effect of low chronic dose cytotyping on multiple metabolic parameters in a rodent model of metabolic dysfunction associated steatotic liver disease or MASLD. These initial promising preclinical results support the therapeutic potential of low chronic dose of psilocybin.

Speaker 2

As we said previously, based on the data these data, low dose psilocybin could improve lipids and glucose with potential fewer side effects over other investigative treatment approaches such as GLP-one, glucosol and GIP. We intend to initiate a single ascending dose Phase 1 trial in obese patients in the first half of twenty twenty four to define the pharmacokinetic, safety and tolerability profile for our modified release psilocybin formulation in this population. This will be followed by a Phase IIa trial to establish critical proof of concept. Data from the CLAN2a study is anticipated in the first half of next year. Just to summarize our multiple upcoming key milestones over the next 12 to 18 months, we anticipate completing enrollment in the ongoing RELIANCE-two study mid-twenty 24 with top line in the second half.

Speaker 2

In addition, we plan to complete enrollment in the REALITE study by the end of this year. Finally, we intend to initiate a Phase 1 clinical trial for the modified release formulation of psilocybin in the first half of this year. Moving on, while Maggie will provide a detailed review of our financial, I would like to emphasize that with current cash on hand to take us into 2025. RALMADA remains sufficiently funded to fully execute our plans to reach data readouts from both RAL10-seventeen Phase 3 trials, RELIANCEU and RELIGHT, as well as conduct the planned Phase 1 for our modified release, siloCyb formulation. I will now turn the call over to Magit to review our Q4 and full year financial results.

Speaker 2

Magit?

Speaker 3

Thank you, Sergio. Today, we issued a press release announcing our business and financial results for the 3 12 months ended December 31, 2023, which I will now review. For the Q4 ended December 31, 2023, total research and development expense was approximately $14,800,000 as compared to 26 $900,000 for the comparable period of 2022, a decrease of approximately $12,100,000 The decrease was primarily associated with the completion of 2 Phase 3 trials and the long term open label safety trial Study 310. The research and development non cash charge related to stock based compensation totaled $1,800,000 in most recently completed 4th quarter. Total general and administrative expense for the Q4 ended December 31, 2023 was approximately $12,100,000 as compared to $11,800,000 for the comparable period of 2022, an increase of approximately $243,000 The increase was primarily driven by an increase in compensation expense due to higher employee related costs.

Speaker 3

The general and administrative non cash charge related to stock based compensation totaled $8,100,000 in the most recently completed 4th quarter. For the Q4 ended December 31, 2023, the net loss was $25,200,000 or $0.84 per basic and diluted share, compared with a net loss of $37,900,000 or $1.28 per basic and diluted share in the comparable period of 2022. Turning to the results for the full year ended December 31, 2023. Total research and development expense was approximately $54,800,000 as compared to $113,300,000 for the year ended December 31, 2022, representing a decrease of $58,500,000 Again, the decrease was primarily driven by a reduction in study costs associated with the completion of 2 Phase 3 trials and the long term open label safety trial Study 310. For the year ended December 31, 2023, total general and administrative expense was approximately $48,900,000 as compared to 47 $900,000 for the year ended December 31, 2022.

Speaker 3

Again, the increase was primarily driven by an increase in compensation expense due to higher employee related costs. For the year ended December 31, 2023, the net loss was approximately $98,800,000 or $3.28 per basic and diluted share, compared with a net loss of $157,000,000 or $5.30 per basic and diluted share for the year ended December 31, 2022. As of December 31, 2023, we had cash, cash equivalents and short term investments of approximately $96,300,000 compared to approximately $148,300,000 as of December 31, 2022. Cash used in operations for the full year 2023 was $51,700,000 Based on our current clinical development plan, our current cash position provides us with ample runway into 2025. Of note, this time period includes data readouts from both Phase 3 trials, RELIANCE 2, Study 302 and RELITE Study 304, as well as the initiation of our planned Phase 1 trial of our modified release psilocybin formulation.

Speaker 3

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

Operator

Thank you. Your first question comes from the line of Mark Goodman from New Partners. Please go ahead.

Speaker 4

Hi, good afternoon. This is Basma on for Mark. For Alliance 2, could you please remind us again how many patients were enrolled before the protocol amendments? And do you expect that due to the inclusion of these patients prior to the amendments that there will be any source of, I would say, noise or to the trial? Or were you able to go back and check the inclusion criteria?

Speaker 4

Thank you.

Speaker 2

Well, thank you. That's Sergio here. That's a great question. That would be the previously to the amendment, we enrolled about 80, 90 patients. And so the as of now, I mean, they will be included in the final analysis.

Speaker 2

And the like we have noticed, if I can expand for a bit, we have noticed that there was a big difference in patient enrolled when the COVID restriction were in place and after the COVID restriction were lifted. So of this 80, 90 patients, about half were enrolled after the COVID restriction were lifted. So I mean, the data blinded, so we don't really know how the data will look like. But we don't have any reason to believe that, this patient would carry any particular baggage also because the sites that where the issue with data was generated in the previous trials, they've never been phrased in RAYAS 2. So the bottom line is that, yes, this patient will be included in the final analysis, but we don't have any particular reason to believe that would carry any particular burden on the final review.

Speaker 2

And we do have on the call Doctor. Andrew Cutler, that is our special advisor for clinical development. And maybe, Andrew, if you are online, you may want to expand a little bit on the question that is, right, will these patients enrolled previous to the protocol amendment carry any weight on the final results?

Speaker 5

Well, thank you very much. I'm here. Excuse me. I think it's a very reasonable question, but I'm pretty confident. I would say I'm very confident that we should be successful.

Speaker 5

The previous study really was very close to being positive. It just missed. And so you don't have to be perfect here. We just have to be better. And I think the changes that have been made particularly with respect to analyzing the quality of the sites and the protocol amendment will make the quality of the second cohort here, which is going to be the majority of the patients, I think will carry through.

Speaker 5

So I'm very confident that despite having some patients enrolled previously, I still think we're going to be successful overall.

Speaker 4

Thank you. That's very helpful.

Speaker 2

I hope that answers your question.

Speaker 4

Yes. Thank you.

Operator

Thank you. And your next question comes from the line of Umer from Mizuho. Please go ahead.

Speaker 6

Thank you for taking our questions. So I have a couple. So just following up on the previous question, at these sites that enroll patients previously, could you maybe elaborate on or minus just like were most of these patients referral by physicians and were there large volumes of patients or was just a few patients at these sites? Yes, so that's sort of the first question and I'll ask a second question after that. Thanks.

Speaker 2

Yes, sure. Thank you, Wei. There were 2 sites with together they enroll about 20% of the Study 301, the adjunctive treatment study and they've never been present in 302. And there were a couple of issues there. We don't really know why the data of these two sites were the opposite or completely different from the other 41 sites in the trial.

Speaker 2

But just to accept that, that was reality. But they've never been in the Study 302. And now we will we are limiting the number of patients enrolled for each site. So we won't have any site that will make a major impact on the final numbers. So we feel confident that with these measures, the we won't what happened in the Study 301 will not happen again.

Speaker 6

Okay.

Speaker 2

Yes. If I could add

Speaker 5

one other quick thing, another modification we made was requiring medical records to ensure that these were legitimate patients who actually were taking an antidepressant and that was not done in the 301 study. So that's another improvement we've made.

Speaker 6

All right. Thanks. And maybe more presently, could you provide some color on maybe the proportion of patients who've been so far enrolled in RELIANCE 2 and maybe Relight as well? And after that, maybe just briefly, Magid, like just tell us help us think to think about how to modest the cadence of spending. Is it sort of relatively flattish or would it sort of go down towards the end of the year?

Speaker 6

Thanks.

Speaker 2

Yes, I'll take the first one. We may not want to go like in real details about number of patients, but we passed half of the trial at the end of last year. And Von Bin is progressing steadily with some variability maybe week to week. But it's on track. And we are confident that the we have top line data in the second half of this year.

Speaker 2

Like when we get closer, we'll be a little bit more precise. And but we stay with this a little bit broad guidance about second half of this year. And reason being that we are screening a quite a bit of patients. I mean, I don't run well, the big the number of screen patient is very large. What we have noticed with the improvement on the protocol, clearly, the streaming failure, it went up significantly.

Speaker 2

We were around 50% on the previous trial. I think I mentioned that before. We are now approaching 80%. So I mean, the selectivity in enrolling patients is much higher. We did look, if I can expand on the reason why these patients are not enrolled in a prescreen, and they're all legitimate reasons.

Speaker 2

And so these are the patients that generated the issue in the previous trials. And definitely, we don't want this kind of patients again in the new trials. So the screening process, it's going very, very well. And the screen failure for legitimate reasons is much higher. So we do believe that the quality is very, very good in this trial.

Speaker 2

I know, Andrew, if you want to add something?

Speaker 5

No, I think you've said it well. It's in line with what I said earlier. We're really trying to make sure we have the right patients, with legitimately with the illness and not patients with mild depression or who are not legitimate patients. So we're really trying to be careful about selecting the right patients.

Speaker 2

Maggot, I think the second one is both for you. Sure. Yes, yes. So hi, Oli. Thanks for

Speaker 3

the question. So G and A expense should follow the pattern we've had in 2023 on a quarterly basis. A lot depends on enrollment patterns, but our current expectation is that R and D should tick up a little bit in the Q3 and then excuse me, in the Q1 and then again increase in the second quarter and then stay at that level through the 3rd Q4 as you can sort of see enrollment pickup in 302 and then pickup in 304 as well. So I hope that helps.

Speaker 6

Very helpful. Thank you.

Speaker 3

Sure. My pleasure.

Operator

Thank you. And your next question comes from the line of Andrew Tsai from Jefferies. Please go ahead.

Speaker 7

Hey, good afternoon. Thanks for taking my questions. So first one, I noticed in your prepared remarks, you said how you're monitoring sites in real time, making changes accordingly. So what exactly are you monitoring for and what kinds of changes are you making on a day to day kind of basis? And then secondly, are there any learnings or thoughts that you might have on Sage's recent rejection for their MDD study, and sorry, not study, but the approval, and if there's any read through or any lessons learned that you think you could apply to AR1017?

Speaker 7

Thanks.

Speaker 2

Thank you, Andrew, and thanks for the call. I will ask you after to repeat the second question because I didn't get it 100%. But the first question is, I think Andrew can go a lot more in detail since he has run his site for 30 years and has done many, many CNS clinical trial. But there is no magic, right? You monitor in general, you monitor every like 3, 4 patients, 4, 5 patients enrolled by the site, how the blinded data they look like.

Speaker 2

Of course, they're blinded, so you don't know if they are good. But you definitely can have a good understanding if there is something wrong, right? When you have data that the variability week over week of the 1st 4 weeks is 1 week up, 1 week down and you go up and down, usually that's not the behavior that placebo and the drug do, right? When there is a trend, there is a trend. So there's one signal.

Speaker 2

And then the overall quality of the sites, right? How the quality is documenting data, they put the data in the database. So there is no one single factor. It's a combination that can give you some sense if the site is providing like the service we would like to. And Dior, I mean, you have done this for a long time.

Speaker 7

Do you

Speaker 2

want to add anything?

Speaker 5

Yes. Yes. There are various quality indicators you look for. And I think we're watching, reminding the store much more closely here. You look for things like are the rating scales consistent, are they kind of all moving in the same direction.

Speaker 5

You look for adherence to the protocol and what we call protocol violations, which indicates sloppiness. This time we're being careful to not let, as Sergio said, any sites just kind of get off to the races and recruit too many patients are too fast. So there are a variety of quality indicators you look for and consistency things you look for, as Sergio said, and we're watching those. And then if there's a site that has issues, we're actually stopping their enrollment. We're trying to figure out what's going on and deciding if we want to continue with them or not.

Speaker 2

Hope I answered your question, Andrew. And if you don't mind to repeat the second one because I didn't get it.

Speaker 7

Perfect. Sage recently had their NDA rejected for MDD. And I'm just curious if the reason behind that rejection has any bearing or read through to your s Methadone basically?

Speaker 5

Sergio, maybe I could help with this one. Yes, go ahead. I was very involved with that. It's really apples and oranges. Their paradigm was very different.

Speaker 5

It was a 2 week treatment paradigm with a very different mechanism. And really the problem was they didn't have a good story for how 2 weeks of treatment would hold a charge. And in their Phase 2 study, there was a suggestion that the efficacy continued on beyond the 2 weeks. However, it was not well replicated in Phase 3. So the FDA had concerns about that.

Speaker 5

It's a very different paradigm, very different medicine. I don't see it as a a competition as an issue or anything that would influence what we're doing.

Speaker 7

Makes sense.

Speaker 2

Okay.

Speaker 7

Thank you very much.

Operator

Thank you, and views both, Andy. Thank you. And your next question comes from the line of Andrea Tan from Goldman Sachs. Please go ahead.

Speaker 8

Good afternoon. Thanks for taking our Sergio or Andrew, just curious if you're able to share what RELIANCE 2 in the RELITE studies are powered to detect remind us what you're assuming here for placebo response?

Speaker 2

Yes, it's great. Thank you, Andrea, for the question. Well, we haven't filed with the FDA the final statistical plan. You usually do it at the very end. There is no advantage to do it before.

Speaker 2

But it's a fair assumption that usually what you want to detect is a clinically meaningful effect. That, according to the expert, in adjunctive treatment is like 2, 2.5 points. So the trial is designed to detect that kind of a change from placebo. And this right, that would be the minimum, right? We hope we can do better than that based on the Phase II data, but that's a fair assumption that would be the statistical plan.

Speaker 2

And with 3 hundred patients involved, it is feasible. It's realistic.

Speaker 8

And then maybe just one quick question on rel P11 here. Just, I wanted to confirm which indication you're looking to study this in?

Speaker 2

Yes. We actually did not discuss the indication. Reason being that we don't really know exactly what kind of indication will look at. Like with the we have to do Phase 1 and for like pharmacokinetic, all the parameters, the new formulations, the new concept, low dose chronic treatment. What we can see is the effect that had on the rodent model that according to the expert, it's somewhat relevant for what should happen in human.

Speaker 2

And what we have seen is that there is a material decrease in body weight with no diet. We're continuing the high fat, high glucose diet. So despite like high fat and high glucose diet, they rode and they lost weight, not as much as a GLP-one, but enough to make it like a valuable drug to treat obesity. But at the same time, we have seen a material decrease in glucose level, like similarly probably a little higher than metformin. And we have seen a very material effect on fatty liver.

Speaker 2

And all these like continuing a diet with high fat, high glucose. So it kind of works on all the span of parameter metabolic syndrome. So weight, glucose and fatty liver. So I mean, the fair assumption that the indication would be a metabolic one. We haven't decided yet and will be decided after Phase 2 proof of concept specifically what the indication will be that could be maybe not obesity by itself, but it could be also combination with the GLP-one and to overcome some of the limitation of the GLP-one like muscle loss.

Speaker 2

But we need to see the data. And there is like a wide range of possibility all on the metabolic area and that are suitable. And we'll try to do something that is a reasonably good way to get the drug approved in a relatively short amount of time.

Speaker 7

Got it.

Speaker 2

And I don't have the straight question. Yes, the straight answer, but that's where we are now, waiting for efficacy data to make the final decision where to go.

Speaker 8

Got it. Maybe just one follow-up there. Have you seen evidence to date preclinically that you are avoiding loss of muscle when you've tracked the weight loss in these rodents?

Speaker 2

Well, in the preclinical, no, we haven't looked at we haven't seen it because we haven't right, right, the model, the rodents don't lose weight because they stop eating or they reduce the food intake like with GLP-one. So it's psilocybin is 5H2A agonist and it acts at the metabolic level. So pretty much it increase the metabolism of fat. So mechanistically, it's not really expected to have loss of muscles unlike the GLP-one.

Speaker 8

Okay. Thanks, everyone.

Speaker 2

Thank you, Andrea.

Operator

Thank you. And your last question comes from the line of Velma Ciatti from Guggenheim. Please go ahead. Good afternoon. Thank you for taking our question.

Operator

This is Perma for Jatin. So following up to the previous questions, can you clarify if you already performed real time start checking in the previous RELIANCE studies? Or is it something that you have implemented new only now? And then I wanted to ask you about the statistical plan, if that is run by a 3rd party or internally within the company? Thank you.

Speaker 2

Thank you for the question. If I understood correctly, the first question is that we did implement a monitoring of the sites in the study in the previous studies and straight answer is no. And there was COVID was a little bit more complicated to do it than now. And we didn't do it. So but that's only one of the changes operational that they've made in the new protocol.

Speaker 2

And so that was one, but the required for medical record is probably the biggest one. And so I mean, the old goal, as we discussed a few times or many times, is to really enroll patients that are affected by biological depression and they have a history. This is an adjunctive trial. So the patient has to come in already on some antidepressant and to have access to medical and pharmacy records, it's a good proxy to be sure that the patient is a real patient. These are things that we didn't do in the previous trials for a variety of reasons.

Speaker 2

And so sorry, can you repeat the second one? Yes,

Operator

I was asking if the statistical plan is designed by a third party or internally within your company?

Speaker 2

Yes. No, it is well, it is design is a collaboration. And so but it is we have the help of it like a large statistical company independent that advise us on the statistics.

Operator

Got it. Thank you.

Speaker 2

Thank you.

Operator

Thank you. There are no further question at this time. Mr. Traversa, please go ahead.

Speaker 2

Well, thank you. And in summary, we remain confident that we do have an approvable drug in RAL1017 and are excited by the potential of our novel psilocybin and derivative program. So we look forward to reporting on progress with our pipeline in the months ahead. And to close, I'm grateful to the Ramada team for their continued hard work and dedication to executing on our mission. And I would also like to extend my sincere thanks to the patients and clinical partners involved in the RAS1017 trials for their participation in the advancement of this promising investigational medicine to development.

Speaker 2

Thank you very much to everyone.

Operator

Thank you. That concludes our conference today. Thank you for participating. You may all disconnect.

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