Relmada Therapeutics, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Ramada Therapeutics second quarter 2021 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Mr. Tim McCarthy from LifeSci Advisors. Please go ahead.

Thank you, Rachel, 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 Pence. This afternoon, RealMata issued a news release providing a business update and announcing financial results for the three and six months ended June 30th, 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, RealMata'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 Vermont's press release issued today and the company's SEC filings, 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, August 10th, 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 would like to turn the call over to Sergio. Sergio? Thank you, Tim.

Good afternoon, and as always, and to everyone. I'm pleased to welcome to Ramada's second quarter 2021 conference call. On today's call, I will provide an update on the comprehensive development program for our lead product candidate for the Adjunctive Treatment of Depression, REL 1017, highlight the substantial market opportunity for this compelling product candidate, and review upcoming milestones. Following this, I will turn the call over to Chuck Enns, Chief Accounting and Compliance Officer, for a review of the financials. I will then provide a brief overview of our recent acquisition of the development and commercial rights to a novel psilocybin and derivate program for neurodegenerative indication. With that, I'll begin by reiterating the significant news shared last week in our top line results from the Abuse of Human Potential or HAP study, evaluating REL1017 versus oxycodone 40 milligrams as a reactive control. As many of you already know, REL-1017 is also known as S-methadone, that is the dextro or right-side isomer of racemic methadone. While there is considerable existing published data supporting a lack of clinical relevant opioid effect, including a very clear statement from the Drug Enforcement Agency, the DEA, we conducted this work for FDA guidance and as it is commonly done for CNS-active drugs. To support the comprehensive data package for our new drug application or NDA for REL-1017 is an adjunctive treatment for MDT. Importantly, our study was designed in a manner that followed the FDA 2017 guidance on the assessment of the abuse potential of drugs. Top line results for the primary endpoint showed that all three doses of REL-1017 evaluated in recreational opioid users demonstrated a highly statistically significant difference versus dose rating for 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 is six times the proposed therapeutic dose. The results for the secondary endpoints, which included scores for global overall liking and the desire of taking the drug again, were consistent with those of the primary endpoints. They demonstrated no evidence of any meaningful abuse potential. More specifically, the results demonstrated that REL1017 was Similarly, highly statistically significant in differences versus oxycodone at all doses, and the placebo results were consistent with approved drugs that are unscheduled, Schedule 4 or Schedule 5. The secondary endpoint data further strengthened the overall results of the study, and are important in that they also informed the FDA's review of the future NDA for RAL-1070. We believe that these collective results have addressed any residual concern regarding human abuse liability as a potential risk for FDA approval by establishing clear separation from the active control that is a schedule 2 mu opioid agonist. In addition, the results for REL 1017 in comparison to placebo were comparable or better to those achieved by many drugs that have been FDA approved as either unscheduled, Schedule 5, or Schedule 4. I would like to note that we are again joined today by Dr. Charles Chuck Gorodensky, that is the former scientific director of the National Institute of Drug Abuse Addiction Research Center. Dr. Gorodensky will be available to answer any questions in regard to the HAB study during the Q&A session. With that, I will now provide an update on RELIANCE, the ongoing phase three program for REL 1017. which consists of two sister, two-arm placebo-controlled pivotal studies, Reliance 1 and Reliance 2, each of which will include 364 participants per study across 55 studies. It also includes Reliance OLS, the long-term open-label safety study, which is enrolling both rollover participants from the pivotal study as well as the novel participants. As a reminder, these studies are designed to evaluate REL-1017 as an adjunctive treatment for major depressive disorder, or MDD, and include two arms, placebo and 25 milligrams of REL-1017, both of which are on top of standard antidepressant treatment for participants who have already unsuccessfully tried a minimum one and up to three existing antidepressant therapies. The primary endpoint is change in the Madras score at day 28. Key secondary endpoints include the change in Madras score at day 7 and change in CGIS, the clinical global impression severity score, at day 28. Both Reliance 1 and Reliance 2 are progressing with top-line data expected the first half of next year. Reliance OLS, the long-term safety study, is also ongoing and enrolling participants as planned. Data from this long-term open-label safety study will be part of the NDA filing package. In addition, we have started dosing in Reliance 3 to evaluate the use of REL 1017 as a monotherapy for MD. As a reminder, the most significantly different between this trial and the ongoing clinical study is the population. MDB monotherapy study will consist of individuals who are diagnosed with depression and are not currently taking standard antidepressant therapy. We anticipate completing this study prior to the conclusion of Reliance 1 and Reliance 2. Moving on, planning for our second human abuse potential study. This one assessed in REL 1017 versus intravenous ketamine, which has been an established test and established history as an effective positive control and is ongoing. We will be the more precise on the timing of the top-line results of this study in the next couple of months based on the speed of recruitment and broadly expect those results by the end of this year or the first quarter of 2022. I wanted to take a moment to reaffirm the need for a new therapeutic option with the potential clinical profile that REL 1017 presents. Depression is common, but for many who suffer, current options are not effective enough. Over 17 million individuals in the U.S. suffer from MDD, and there are currently limited therapeutic options to help these patients. Traditional antidepressants can take up to four, six weeks to show efficacy and have significant side effects. Moreover, approximately 65% of MDD patients do not respond well to the first antidepressant treatment, and approximately 30% of MDD patients do not respond to any of the current oral antidepressants. Adjunctive treatment options are crucial because they enable a change in therapy without requiring the significant time that SSRIs and other drugs require when switching agents to the withdrawal and other potential side effects. Despite these challenges, there are only Currently, three FDA-approved adjunctive treatment for major depressive disorders, and all three of them are all antipsychotics. Based on its novel mechanism of action and the collective positive data generated to date, including phase two results that showed statistically significant, rapid, and sustained antidepressant effect with a favorable safety and tolerability profile, we believe REL1017 has the potential to be the first oral antidepressant FDA-approved for adjunctive treatment of MDT. I'm now passing the call over to Chuck for his view of the financials, and I will then touch on our recent acquisition of the development of commercial rights to a novel psilocybin and derivate program for neurodegenerative indication. Chuck, 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 three and six months ended June 30th, 2021, which I will now review. For the second quarter ended June 30th, 2021, total research and development expense was approximately $17.3 million as compared to $5.3 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 second quarter into June 30, 2021, was approximately $9.1 million, as compared to $7.4 million for the comparable period of 2020. This increase was primarily due to increases in personnel costs, stock-based compensation, and consulting services. For the second quarter, end of June 30, 2021, we recorded a net loss of approximately $26.6 million, or $1.56 per basic and diluted share, compared to a net loss of $11.1 million, or 73 cents, per basic and diluted share in the comparable period of 2020. Turning to the results for the six months ended June 30th, 2021, total research and development expense was approximately $31.4 million as compared to $9.8 million for the comparable period of 2020. Again, the increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL 1017. For the six months ended June 30, 2021, general and administrative expense was approximately $17.5 million, as compared to $12.9 million for the comparable period of 2020. The increase was primarily due to increases in personnel costs, stock-based compensation, and consulting services. For the six months ended June 30, 2021, we recorded a net loss of approximately $48.8 million, or $2.90 per basic and diluted share, compared to a net loss of $21.8 million, or $1.45 per basic and diluted share, in the comparable period of 2020. On June 30th, 2021, the company had cash equivalents and short-term investments of $109.1 million. compared to $117.1 million on December 31, 2020. We continue to expect that this strong cash position will support us through at least the multiple data readouts we anticipate through the first half of 2022. I will now hand the call back to Sergio for his further remarks on the most recent progress. Sergio?

Thank you, Chuck. Last month,

we announced the acquisition of development and commercial rights to another psilocybin and derivative program from Arbor Mantis for all ex-Asia territories, including U.S. and Europe. At this time, you will have to bear with us. We cannot share too much about the program for competitive reasons. But importantly, what we can share is that this program will focus on neurodegenerative disorders and is distinct from other and complementary to the REL 1017 program, which is focused on psychiatry. This agreement expands our development pipeline and, in particular, leverages our core expertise in mechanism of neural plasticity, but at the same time expands our work into indication outside of depression and psychiatry. In summary, REL 1017 development program remains on track and was recently furthered the rest by the results of the HAP oxycodone study. They were consistent with our studies to date and confirmed the extensive body literature indicating the lack of abuse potential of REL 1017. Looking ahead, we anticipate multiple key data readouts over the next 12 months and have added a potential long-term growth driver with the acquisition and development of commercial rights to another psilocybin and derivative program. Importantly, as Chuck 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 our mission. I would like to extend also my sincere thanks to the participants and clinical partners involved in the REL. 1017 clinical trials for the effort in advancing this important therapy through the clinic and as expeditiously as possible. We'll also like to thank Dr. Gorodesky for being able to participate to these calls. And Dr. Gorodesky is one of the well-recognized authority in the whole field of abuse and narcotics and so on. And it would be, it is a great opportunity if there is any question regarding our study that, you know, to be addressed to Dr. Gorodetsky to get an educated and a very credible answer. We can now open all the call for questions.

And operator, can you please open up?

Thank you. We will now begin the question and answer session. To join the question queue, you may press start, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you were using a speakerphone, please pick up the handset before pressing any keys. To withdraw your question, please press Start and 2. Your first question comes from Mark Goodman from SVP Lee Rink. Please go ahead.

Sergio, can you remind us where the 55 sites are of Reliance One? Just kind of break down U.S. versus U.S. and just give us a sense of whether everything's kind of moving forward, you know, as you had planned. I mean, obviously COVID is having some impact again on a bunch of clinical studies out there. So just curious how it's doing there with your study. And second, just curious, are you working with the same people at FDA in the division that you were working with at the beginning who signed off on your phase three program. And the reason I ask is we've had a couple of setbacks recently at other companies. And just, you know, sometimes it's because there's changes at FDA. And so I'm just kind of checking the box, making sure there's no changes there. Thanks.

Thank you, Mark. Well, the first part of your question is easy. The 55 sites are all in the US. So we are a US company. We have nothing, no operation, nothing outside of of the U.S., except some collaboration with very high-end universities like Switzerland and, I believe, in Italy, too. But for development and all the sites in the U.S. How the study is going? Well, we started a few months ago. It is a large program. We are actually running four different clinical trials now that we have finished with the human abuse potential study. So it's two phase three, then there is a long-term safety, and then there is the monotherapy that just started the areas of recruiting. We will be more precise on the timing, but you're asking about the impact of COVID. We did not feel any major complaints or any major feedback from the sites. about the impact of COVID. Now, the last few months has been pretty quiet. Now, there is a little bit of research. So, you know, we'll be more specific in the next two, three months. But, you know, straight answer is that no, we don't expect any major delay or any major impact from the COVID. A lot of work is now done remotely, like the interviews or the madras. They all, you know, most of them, they are done remotely. And both the operator, the raters, and the patient actually like that they don't have to go to the hospital. I believe they go, in our study, they go only once a week for four weeks, so it's four visits in the hospital. Taking your question on the FDA, we don't really know what happens. I believe you mentioned two. One must be Acadian, the other one must be Axiom. And we don't really know what the specifics are. The way I can best answer the question is that we do believe that these are specific topics related to the programs, not a general approach from the psychiatry division. And from our perspective, we did not have any particular issue with the FDA. No delays, no... no question raised beyond the normal course of business. So we did not have any of this issue or topic so far. Clearly, we did not file an NDA yet, so we cannot exclude everything. We'll know it when we file the NDA. But so far, the FDA would say it's been pretty benign in helping us how to develop this problem. One thing is they clearly recognize there is an issue, there is a need. and so they've been extremely cooperative. I hope I answered all your questions in a satisfactory way.

Thanks.

Thank you. Your next question comes from Andrea Pan from Goldman Sachs.

Please go ahead.

Hi, everyone. Thanks for taking the question today. Sergio, maybe one for you. Can you provide more color on the nature of your discussions with the FDA regarding Reliance 3? Just wondering if this could be considered a registrational data set, and are you thinking that you would look to include the data within the initial filing package?

Thanks for the question. I have to be a little soft on this one because the abuse data, they are very fresh. And clearly, they will be, the FDA will look at this data, and we will provide them as soon as, you know, we have something that is reportable to the FDA. The top line is not enough. And yes, there is, you know, the monotherapy, we don't have any data yet on monotherapy. So it would be a little bit aggressive approach. to go directly to the FDA and to claim about starting Phase III and doing registration trials. But we have now, you know, we have the HAB study, we have the animal study, so the package, the preclinical package and the special population is becoming pretty strong. So, you know, I cannot answer your question directly yet because I don't have the answer, Yes, there is a chance that, you know, we may do something different from the monotherapy and to make it a registration trial. The only difference would be to expand the number of patients, but it's a bit too early to give you a straight answer. We will update everybody, you know, as soon as we get some certainty of what we can and what we cannot do.

Great. Thanks so much. Thank you. Your next question comes from Andrew Tsai from Jefferies.

Please go ahead.

Okay, great. Thanks, and good afternoon. Maybe a question for Chuck. You know, our understanding is, you know, the eventual scheduling of methadone or any drug out there will boil down to the eight-factor analysis. So I was wondering if you can talk about some of the, I guess, seven other factors. What are they? And then as it relates to them, talk about the strength of the data and evidence you've seen for S-methadone as it relates to those factors. And at the end of the day, are these factors equally weighted or does the abuse liability study carry more weight? And then I have a follow-up, please. Thanks.

Chuck, is it yours? Chuck Dorodesky. Yep.

I don't have the eight factors in front of me, but I think that they would put a good deal of weight at this point on this abuse liability study. It's probably the single most predictive kind of study that you could run to predict before the drug gets on the market what the abuse is liable to be. And the preliminary data that we've seen so far in the analysis looks very, very positive, as Sergio summarized it. And I think that there's no specific one of the factors that FDA keys on. They'll look at the whole picture. They'll look at all of the data that we have. But I think they'll put a good deal of weight on a study like this one. It was very well done. It's the most recent methodology. The statistical analysis follows all of the recommendations. And the data looks very positive. This looks like a drug. It has very low, if any, abuse liability and is certainly consistent with either no scheduling, which would be difficult because of international treaty obligations, or a very low level scheduling like in 405.

Makes sense. Thanks. And my second question is, I mean, to your knowledge, are there precedents where, I guess, the highest dose of a drug has shown, I don't know, 65 on VAS and ended up getting a favorable DEA scheduling? I know this is wrong to think about, but I just want to know if it's common, I guess, for a positive abuse liability study to kind of show a quote-unquote shallow dose response, positive meaning that the drug ultimately got a favorable scheduling.

Well, handling that again, yeah, I think there are examples even within the opioids, and there's certainly some examples within the anti-epileptics and even an anti-migraine drug where the drug is significantly different from a positive control as it was here with oxycodone, but may show a very slight liking and even that seems to be somewhat nonspecific so far, and might show some difference from placebo and still be a very either unscheduled again or scheduled very low. I mean, like the drug Faberzi for irritable bowel, which did indeed show significant differences from placebo, even at doses that were only two or three times above the recommended therapeutic dose and still wound up down in Schedule 4. So I think that there are certainly precedents for there being a very low abuse potential, but not necessarily absolutely zero, and still be consistent with very low scheduling.

Thanks for all the call there.

Thank you. Your next question is from June Lee from Trust Securities.

Please go ahead.

Hi, thanks for taking our questions. Where are you in terms of enrollment for the ongoing Reliance programs? Are you on track to report top line data in the first half of next year? And you sent data from Reliance 3 before Reliance 1 and 2. You know, what does that mean? Are we getting data really early next year, first quarter or second quarter? We'd love to hear some color on that. And can you remind us what the design of Reliance 3 is, the doses and the study arms used in that study?

And that's a Phase 2, correct? Thank you, John.

Yeah, I'll answer in the similar way or same way as Andrea at the end. It's a bit too early to say how the recruitment is going, but clearly recruitment was maybe the data point that would make more sense because it is more a clear answer, the number of sites. And I have the number in front of me because I answered and to come prepared to the call. So we have 52 sites on 301. The first one started very late in December. 27 sites already active, up and running in 302, and 10 sites in 303. So, 303 is probably smaller, so it's normal to have a smaller site number, and we also started very recently. So, I mean, the vast majority of the sites are up and running. Consider that a good part of these sites, they are shared. Not many, but some on 301 and 302, so when the sites finish or reach the top of the number of patients that they can enroll in 301, they will automatically switch to enrolling patients in 302. The long-term safety study, it's open to everybody and including new patients. And the 303, that is the monotherapy, the reason that we say that it will be finished before is that I would not make major comment on the number of patients because we are still in that thinking process and mode and also with the FDA to see how to maximize the outcome and maximize the value of that trial. So we may expand the number of patients and make it a registration study, as I mentioned to Andrea. But the reason that we believe will be finished early is that the recruitment of naive patients or patients that are not currently on antidepressants is much faster than as an adjunct treatment. If there are protocols, it's exactly the same. The only difference is the patient population, but clearly there are more patients that are not on treatment and especially that are more willing to start with a new antidepressant. than to add something to a current antidepressant. So it's related with the, not on the number of patients, but it's related to the speed of recruitment. So, you know, my answer is satisfactory.

Yeah, yeah. We will update on this. Got it. And then as a monotherapy, do you think it's possible that you might want to consider higher dose or is higher dose still not really useful in your view? So 25 milligrams.

Yeah, thanks, John. No, it's the same dose. It's the same protocol, pretty much, with the difference in patient population. 25 milligrams, and we look at all the data from the very early animal studies to the Phase II, and 25 milligrams is the optimal dose. It's probably not very different from the 50 milligrams in terms of efficacy and in terms of side effects. The reason that the 25 milligrams is not because of tolerability or safety. The real reason is to reduce the placebo effect. Less arm, less placebo effect. So using only the 25, we only have two arms. That is minimal placebo effect in terms of number of arms that we can have. And adding the 50, we don't believe could have increased the placebo effect, but would not have improved or increased or the efficacy of the drug. So that's the real reason to choose N25, and it is across the board. All trials, they use N25.

Thanks so much for your comment. Always a pleasure.

Thank you. Your next question is from Jay Olson from Oppenheimer.

Please go ahead.

Oh, hey, congrats on the progress and thanks for taking the questions. Have you seen any published reports of increasing diagnosis rates for MDD during the pandemic? And have you seen any differences between the baseline characteristics of patients enrolled in your studies versus previous MDD clinical trials? And then I had a separate question if I could.

Yeah. Well, thanks, Jay. Thanks for the question. If we have been reported, I think somebody that we just spoke on the call published something on the very big increase in number of patients diagnosed for depression. And so, yes, there are reports out that show that there is an increase up to like 400%. That's hard to believe, but I read that number somewhere. In terms of the nature of the depression related with the pandemic, I don't really see the patient profile. They are enrolled. And so that's one I would pass. We have criteria for inclusion and exclusion that I don't believe they're related with the pandemic or not. So I don't know if there has been a change. in how the profile of the depressed patient changed with the pandemic. I assume probably some relation between the pandemic and some manifestation of depression, there must be, economic crisis and jobs, and so they all have an impact. And I do believe that, I actually read it, more than believe it, that COVID itself, the virus has an impact on the brain, and there could be some post-COVID, not like non-job-related effect, but virus-related effect on how the depressed patient shows his symptoms. But I would love to be able to give you a more specific question, but I don't really see the the patient profiles of the patient are involved.

Okay, great. Thank you. And then could you talk about the differences between GABA and NMDA mechanisms since both appear to provide rapid onset of efficacy in MDD? And what would cause a physician to prefer one mechanism versus the other in MDD?

Yeah, that's also a very good question. Well, yeah, they end, you know, kind of going toward the same direction, but from opposite side, right? One is an activator and the other one is an inhibitor. So it is, you know, pretty different in terms of mechanism. Probably, and this is just looking at the data available, probably the biggest difference in what we believe physicians would prefer the NMDA mechanism is that the NMDA tends to be stable or improve the efficacy over time while the GABA does the opposite. And so if it's true and the FDA strongly believe that the depression is a chronic illness, then you want to have a drug that you can take for a long time in terms of safety, but also that keep the efficacy or increase the efficacy.

over time. Great. Thank you for taking the question. Yeah, it's perfect. Thank you.

Thank you.

Your next question is from Yatin Suneja from Guggenheim Securities. Please go ahead.

Hey, guys. This is Eddie on for Yatin. Thanks for taking the question. So, can you give us a little more sense of how the Reliance trial is powered? Specifically on the placebo arm, sort of how are you modeling what a placebo effect could be here?

And what are...

Eddie, I don't know if it's just me, but I only could hear the first, like, 20 seconds of your question.

Can you hear me better now?

Yes, much better, much better.

Yeah.

I can ask the question about the power.

Yeah. Yeah, sure. I'll be happy to do that. So as you definitely remember the phase two data, the effect size, it was something around 0.7, 0.9. Assume that fluoxetine that I work with has an effect size about 0.3, and it got approved. So the effect size of REL1017 was kind of three times what fluoxetine has. Clearly, the phase two, so we don't want to, although we believe we have an extremely effective drug, we didn't want to take too much risk. So we make a conservative assumption in the phase three program across the board. Rule of thumb coming from the expert is you lose about 25% of effect size when you go from phase two to phase three for a variety of reasons. Clearly, this loss of effect size can be modulated and it can be adjusted using, for example, like having only two arms instead of three in phase three versus phase two. So, that clearly makes, should make a material difference. But even assuming the, some loss of effect size, we want it to be conservative. So, we, in the assumptions, statistically assume that we'll have about half

the effect size that we had in phase two. 0.7 to 0.35 to 0.4. That should be conservative.

And then on the monotherapy study, like I said, are these naive patients or is there a certain washout period before their last sort of treatment of antidepressants?

I believe mostly they are naive. I do believe they are allowed to, I don't remember the exact how much time they have to pass before they can get into the trial, but there is a considerable amount of time of washout before they can get into the trial. As you know, it is now well known that my time when I was working on fluoxetine was not known, but SSRIs, they have a pretty significant withdrawal effect. So the last thing you want to do is to have a patient that is not only depressed, he gets into with the withdrawal effect from SSRIs. So I believe in that. I don't remember. I can give you the exact number offline, but it's not a week or two. It's like, I believe it's three months or something like that, or two months when they have to be clean, not taking any antidepressants before to get it.

Thank you.

Thank you.

This does conclude the question and answer session. I would like to turn the conference back over to Sergio Traversa for any closing remarks.

Well, thank you, operator.

Thank you all for joining us on the call today. We are pleased to share our recent progress with you and the REL 1017 clinical development program. It continues to advance. We are excited about the important catalysts that lie ahead of us and will keep you updated on clinical results and activity through the remainder of 2021. Thank you again for joining us on the call and enjoy the rest of the day.

Thank you.

Thank you. This does conclude the conference for today. Thank you for participating. You may now disconnect.