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spk00: Greetings. Welcome to the Realmata Therapeutics Incorporated fourth quarter and full year 2020 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to your host, Tim McCarthy. Please go ahead.
spk04: 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, Maggot Shenouda, and Chief Accounting and Compliance Officer, Chuck Ence. This afternoon, RealMata issued a news release providing a business update and announcing financial results for the fourth quarter and full year ended December 31st, 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, RealMotto'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 RealMotto'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 23rd, 2021. 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. Sergio?
spk10: Thank you, Tim, and good afternoon to everyone. I'm very pleased to welcome you to Ramada's first ever earning conference call. We do believe that the company has reached a maturity time that is a good time, a right time to have a call. And since we expect a significant number of near-term catalysts moving forward, we intend to host update calls on a quarterly basis. The plan for today, because this is our first earning call, and some of the people connected may not be very familiar with the company. I will begin with a brief overview of RealMada, 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 Megan 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, Ramada is a late stage central nervous system CNS company. focus on the development of REL 1017, which has the potential to address the significant medical needs of major depression disorder, MDD. There are about 17 or more million people in the U.S. They are affected by MDD, and they have limited safe and effective therapeutic options. A standard antidepressant can take up to four to six weeks to show efficacy. And up to 65% of the patients do not respond or do not respond well to their first antidepressant treatment. And there are about 30% of the patients that don't respond up to four different antidepressant treatments. REL1017 is being developed as a new chemical entity. It's already administered as a once-daily pill. We have patent protection up to 2033 with additional patent files that could extend the 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 phase two data that showed statistically significant rapid and sustained antidepressant effect with a favorable safety and tolerability profile, we do believe that REL-1017 has the potential to be the first FDA-approved antidepressant for the adjunctive treatment of MDD. In the Phase II study, REL-1017 achieves statistically significant significance compared to placebo on all evaluated efficacy measures. Specifically, there was solid effects we observed on the Madras 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 seven days of dosing in the study, and it may suggest a 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 in our Phase III program of REL 1017 for the adjunctive treatment of depression. I will review the ongoing phase three program and discuss the upcoming milestone shortly. But before I do that, I will turn the call over to Magid, who is the view of the financial. Magid is all yours.
spk08: Thank you, Sergio, and good afternoon, everyone. Today we issued a press release announcing our business and financial results for the fourth quarter and full year ended December 31, 2020, which I will now review. For the fourth quarter and year ended December 31, 2020, Total research and development expense was approximately $14.9 million and $36 million respectively, as compared to $1.6 million and $7.9 million for the same periods in 2019. The increase was primarily related to an increase in costs associated with the execution for a broader clinical program for REL 1017. Total general and administrative expense for the fourth quarter and year-ended December 31, 2020, was approximately $6 million and $24.9 million, respectively, as compared to $2.9 million and $7.2 million for the same period 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 $3.31 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 a 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?
spk10: Thank you, Margaret. As we had a recent announcement last week, I would like to start with an update on the human abuse potential or HEP studies. We recently announced that we early discontinued study 120, which was assessing REL17 liking versus oral ketamine as an active control. A pre-planned and blinded analysis of the initial study completers, representing approximately 20% of the planned 40 patients, showed that a large percentage of these patients 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 month, and proposing an 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 control study by the end of this year. Again, we would like to underscore that neither in the discontinued study nor in the previous clinical studies in our program or historically in existing literature, S-methadone has been associated with any psychotomimetic allotinogenic effect, and we are encouraged by the confirmatory effect of these results. The HAP study 124 that is comparing RAL1017 to oxycodone continuous 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 1070, specifically for the FDA evaluation and the DEA determination of scale. But it will also represent an important opportunity to add to the existing strong body of literature that clearly differentiates REL 1017 from methadone and any perceived association with dissociative symptoms or opioid effects. I will now share the key aspect of reliance that is our phase three program for REL 1017. The pivotal studies, reliance one and two, consist of two sister two-arm placebo-controlled trials that include 364 patients per study across 55 sites. These studies will evaluate 25 mg of REL1017 and placebo on top of the patient's existing antidepressant treatment. These are patients who have failed to respond to minimum one up to three previous courses of antidepressant therapy in the current depression episode. The primary endpoint of this trial is change in MAZRA score at day 28. Key secondary endpoints include change in MAZRA score at day 7, and CGI-S score at day 28. We believe that our Phase III program is optimized to reduce the placebo effect risk based on the design is a two-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 evolving as expected, and sites have come online nicely. We continue to anticipate the top-line data from Reliance 1 in the first half of 2022. The second phase 3 trial, Reliance 2, is a mirror study of Reliance 1 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 enrolled in patients. This trial includes patients from Reliance 1, Reliance 2, but also de novo patients. We are also on track to initiate our study evaluating the use of REL1017 as a monotherapy for MDD in the second quarter. We are currently evaluating options for this study design, and we will provide greater details once this is finalized. As you have just heard, it is an extremely busy clinical development period at Ramada with several key data readouts over the next three to 15 months. Importantly, as Megan highlighted, we have a strong balance sheet with enough cash to support us through all of these respective data points. I would like to take a moment to express my gratitude to the RealMada 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 partners involved in the REL 1017 clinical trials for their efforts in advancing this important therapy through the clinic as expeditiously as possible. With that, we will now open the call for questions. Operator, can you please open up for questions?
spk00: Absolutely. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Andrew Tsai with Jefferies. Please go ahead. Andrew, your line is live.
spk03: Oh, hey. Good afternoon. Thanks for taking my questions, and congrats on all the progress, guys. So maybe for those in the audience, help us understand, remind us at a high level, you know, you have these two abuse liability studies. reading out fairly soon. So, remind us, what would you like to see on the VAAS likability scores for both of these studies? What would positive data be like as we think about the three 10-17 doses versus the two comparators versus placebo? Just maybe talk us through that, and I'll have a follow-up. Thanks.
spk10: Sure. Thank you, Andrew. And, Michael, you want me to take this? Sure. So very top-down. These are not very complicated studies. And if you look at, like every study, the data point that we expect and that people should look at as soon as the data are available is each of the three different doses of REL-1017 of esmetadone, 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 IV in the 120 studies. These are really the two things that that matters. One thing that I would like to clarify as a question that we have been asked at some time or frequently, S methadone to be descheduled or non-scheduled, it does not need to be the same as placebo. It is an antidepressant. It is a CNS active drug. So it's possible and easily possible that it will differ from placebo if you take, you know, many of CNS active drugs that are not placebo. But the key point is that there has to be statistically significantly trauma control. I hope I answered your question.
spk03: Very clear, Sergio. Thank you. 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? Thanks.
spk10: Well, it's a good question. We'll decide when we see the data, but, you know, top line, usually you receive really just very limited information, 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 of course we will disclose it. Ultimately what really matters is the VAAS score and the statistical significance. We have treated many patients with asthmatism now. We know how the profile looks like pretty well. So we have, you know, phase one, phase two. So we're not expecting any surprise from asthmatism profile.
spk03: Yep. Thank you, guys. Appreciate it. Thank you, Andrew.
spk00: Next question comes from Mark Goodman with Learink. Please go ahead.
spk05: 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 timeline, right? Is that true?
spk10: Yes, Mark. Good afternoon. 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. Right.
spk05: 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, 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? Right.
spk10: Correct. Look, we have, this is not really a tossing a coin kind of trial. We have 13 patients treated with 150 in phase one. None of them showed any opioid-like effect or oxycodone-like effect. We have 21 patients in the phase two that was the 50 milligram arm that as a load in those, they took 100. None of them showed any opioid-like, oxycodone-like effect. And so we do have enough evidence that even the 150 does not have any, even close to what the effect of OxyColon can be. Of course, you know, we have to show it in the control study. But, you know, we have quite a bit of evidence already out there.
spk05: And then lastly, could you just, any update on enrollment, how many sites are up and running for Reliance One? That's it. Thank you.
spk10: Yeah, you caught me on that. It's evolving very quickly, so I don't have the exact number. Megan, do you know? We are getting close to all the sites involved because we will start very soon Reliance 2. So we wanted to wait to have Reliance 1 well up and running before to start the second one. I don't have the exact number, but it's close to having all of them up and running. Thank you.
spk00: Next question, June Lee with Tru with Securities. Please go ahead.
spk09: Hi, thanks for taking our questions and thanks for the updates. So for the upcoming human abuse potential study, has there been a similar preplanned analysis for the HAAP study using oxycodone as an active comparator as, you know, what was done for the ketamine study? And if so, you know, 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 HAB study? And I have a follow-up, thank you.
spk10: 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, nothing weird about data. And it's mostly done for safety. And we have seen that with oral ketamine, it was kind of also looking at futility that is not very complicated to understand. After five arms, there was no likability at all. And one of the five arms, even it was blinded, but it has to be ketamine because every patient takes every arm. And it was pretty straightforward that... there was an issue with the ketamine not behaving as a control, a valuable control. So we will do the, we haven't, 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 beating with other things. So we had to wait a couple of more months. So, you know, at some point we do the, the analysis, but if there is nothing notable, we will not even know it, that it happened. They only will notify us of something that will show that, you know, there is any unexpected effect or side effect or anything like it happened with ketamine that said, look, this thing doesn't look, it's going the right direction.
spk09: So you were alerted because the ketamine arm didn't separate from placebo by whoever was conducting the study. But for the octocodon, you know, HAP study using octocodon, you don't know. And you won't know if there's no real issue with the study.
spk10: Right, right. We will only be notified if there is something that we, the material that we need to know. So can we only side effect or something safety or something that make that the study will not generate any valuable, useful results like ketamine?
spk09: Right. And then like following up on Mark's question is the hundred and fifty arm or any one of the dosing arms actually does not separate from the active comparator statistically. Then do you automatically get a schedule two or what's the sort of 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 happened to be likable, what's the process?
spk10: Yeah, this is a great question, John. We are not hiding that the likability of the results of the study is important, but it's not the only factor that will determine the scheduling or non-scheduling of S-methadone. there are eight factors that the FDA considers when they determine the recommendation for the DEA. One is likeability, and it's very important. If you don't like something, it's more difficult. You abuse it or you get dependent on it. But there are other factors like, look, the FDA at the end is the real focus is on safety. And the reason that The oxycodone or the opioids, they are a lot more under scrutiny and the focus of the FDA. It's not because they're more abusable than ketamine or than alcohol or the PCP. And it's because they're dangerous, right? If you overdose an opioid, you can have respiratory depression. And unfortunately, you can have some serious consequences. If you overdose ketamine, it happened, but you fell asleep or it's used as an anesthetic. specifically because it does not keep respiratory depression. And the dangers or the potential risk is a very important factor in determining the schedule. That's why ketamine is Schedule 3, not because it's less abusable than oxycodone. It's because it's less dangerous than oxycodone. There are eight of these factors. So likability is one, and then you have dangers, the history, the pharmacology, and so on. Clearly, likability is important. To answer directly your question, if by chance one of the doses of X methadone will not separate statistically from 40 mg of oxycodone, then it will depend on the FDA overall analysis and how they will consider the other factor. Consider that X methadone in the past has been used, It's not used. It's been tested at 900 milligrams, and nothing happened. People did not like it, and nothing experienced any serious side effects. 900 milligrams is 36 times, I believe, is 36 times the therapeutic dose. So definitely we feel comfortable that safety is not the major concern. potential risk for asthmaticism.
spk09: So it's not an automatic Schedule 2. It's one of the things that happens. That's helpful.
spk00: Next question. Yatin Sinesia with Guggenheim Securities. Please go ahead.
spk07: Hey, guys. This is Eddie on 3Out, and thanks for taking the question. So just you talked about for Reliance 1 on sort of the checks that you are – the screening, multiple levels of screen 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 Madras improvement that would give you confidence that you had a proper screening process? And then I have a follow-up on the human study.
spk10: Great. So let me take this one. So how do we avoid or reduce the risk of having non-depressed patients in the phase three in reliance? Besides, you know, the two arms that is easier to, you know, the placebo effect is lower than multiple arms, specifically for the patient selection. And, you know, one point that we like to make, we have been advised by, you know, our advisor that the major risk in running a phase three 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 the site select, 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, you know, this patient may not be depressed, may have some other issue, or there may be a personality disorder. The data also seen by, I believe, by the CMO for the safety control, and clearly there is an opinion here. There is probably the most important of the steps beyond these three steps is the review done by a group. Margaret, can I say the name? Yes, it's not. It's CT&I. It's a group that was not from MGH or Harvard. And what they do, they re-diagnose the patient. So only the site and CT&I, they have a contact directly with the patient. So it's a phone interview, and they administer a different scale. So it's not Hamilton, it's not Madras. They administer a scale called 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 or there has been an event that has generated the current episode of depression. So it gives a little bit more complete picture. And they have the last say on the patient if it is suitable for the trial or not. So we have four different ways of which the one, the last one, the CDNI, we do believe it's effective. We use it in phase two, and you have seen the results. It was pretty well done, pretty effective, by the way. I hope I answered.
spk07: Yeah, no, that's great. Thank you for that, caller. 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? 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?
spk10: Yes, the answer is yes. There's going to be an IV placebo and the IV oral.
spk09: Okay, thank you.
spk00: Next question, Jay Olson with Oppenheimer. Please go ahead.
spk06: Oh, hey, guys. Congrats on the progress, and thank you for taking my questions. I was curious about the startup activities that remain to be completed before initiating the Reliance II second pivotal trial. and also the Phase II monotherapy trial, and whether or not you expect to initiate the Phase II monotherapy trial before or after Reliance II starts.
spk10: Yeah, Maggot, Maggot is really helpful in looking at the operation as entirely. Maggot, do you want to take this?
spk08: Sure, sure. Thanks. Thanks, Sergio. And thank you, Jay, for the question. So, with regard to Alliance 2, I can, you know, safely say that we're close to initiating that study. I think, you know, 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, Shay?
spk06: Oh, I was wondering for your Phase 2 monotherapy trial, what remains to be done before you can initiate that study? And should we expect that before or after Reliance 2 initiates?
spk08: So I'll answer the second question first. So expect that after Reliance 2 starts. We still have a fair amount of work. We've completed the protocol. We've submitted it to the FDA. We're about to submit it to the FDA. And, you know, we have also selected a CRO. So, I think, you know, a lot of the pieces are coming together, but our expectation remains that we'll start that study by the end of the first half.
spk06: Oh, okay. Great. Thank you. And are there any details about the study design for the monotherapy study that you could share with us?
spk08: I think we're not quite prepared to do that yet. So, give us some time and we'll be able to, you know, give you a more full characterization of the study. You know, you can expect it to be very similar to the Reliance 1 and Reliance 2 studies and, you know, in that it'll be two arms, placebo versus 25 milligrams of REL1017. de novo patients, but beyond that, we're not, you know, we're ready to disclose number of sites and such, you know, and any limitations on patient selection.
spk06: Okay, got it.
spk10: We'll look forward to that. Yeah, the biggest difference is going to be the patients. So, adjunctive treatment versus monotherapy. That's going to be the difference.
spk06: Okay, got it. Thank you again for taking the questions. Thank you. Pleasure, Jay.
spk00: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Salvine Richter with Goldman Sachs. Please go ahead.
spk01: Hi, everyone. Thanks for taking the question. This is Andrea on for Salvine. Sergio, maybe a question for you just based off of what you saw from the The oral ketamine study, understand the positive control didn't separate here, but does this give you any increased confidence in the profile of REL1017 and what you might expect to see versus the oxy?
spk10: Well, good afternoon, Andrea, and thanks for the question. Well, yes, with the limited, that is, the limitation that was a blinded analysis, So we don't know who took what, but they all took all arms. So we have seen no evidence of dissociation, hallucination, delirium, and out-of-body experience in any of the patients that's been reviewed. It was 20% of the blended total. So clearly, S-methadone did not show anything because even blinded, there was no sign of this in any of the arms. So, yes. it gave us a good level of confidence that the profile confirms what we have seen 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's a little bit unlikely that a drug would behave differently into similar studies just with a different control arm. So, I mean, nobody liked it or nobody has experienced anything that could be likable in the ketamine study. Yeah, totally possible, but we see it as unlikely that we change totally behavior. So, yes, the answer is yes, gave us, you know, supported the confidence that we have that smetadone is not a likable compound.
spk00: I would like to turn the floor over to Sergio for closing comments.
spk10: 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 remembered. But we look forward to the year ahead, and we'll provide further updates throughout 2021. So thank you all again, and I hope you will enjoy the rest of the day.
spk00: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
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