Relmada Therapeutics, Inc.

Greetings, and welcome to Ramada Therapeutics, Inc. Third Quarter 2021 Earnings 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tim McCarthy.

Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer Sergio Traversa and Chief Accounting and Compliance Officer Chuck Entz. This afternoon, Ramada issued a news release providing a business update and announcing financial results for the three and nine months ended September 30th, 2021 and filed its quarterly report on Form 10Q 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, Ramada'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 questionnaire statements contained in Ramada'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, November 11, 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?

Thank you, Tim, and good afternoon to everyone. And we also have on the call today, Maggie Shenouda, that is our CFO on top of Jack Hance. And I'm pleased to welcome you to RealMada third quarter 2021 conference call. On today's call, I will provide an update on the comprehensive development program for our lead product candidate, REL 1017. for the Adjunctive and Monotherapy Treatment of Major Depression Disorder, or MDD, highlight the substantial market opportunity for this compelling product candidate, and review upcoming milestones. Following this, I will turn the call over to Margit Schnuder, Chief Financial Officer for Review of the Financials. I will then provide a brief overview of the data that we recently presented at the Neuroscience Education Institute Congress, Luskin. With that, I will begin by highlighting the point that we will have data readouts in each quarter of next year. I will elaborate further on this shortly, but in summary, in the first quarter of next year, 2022, we expect top-line results from our second human abuse potential or HAP study, this one assessing REL1017 versus intravenous ketamine. Following this, in the second quarter, we anticipate top-line data from Reliance 3, the ongoing monotherapy registration of Phase 3 trial. In the third and fourth quarter of 2022, we expect top-line results from Reliance 1 and Reliance 2, respectively, the two ongoing Phase 3 sister two-arm placebo-controlled Pivotal studies. With that, I would like now to reiterate the important development and regulatory update that we provided for REL 1017 last month. To begin with, the Reliance 3, which aims to randomize 364 patients, is expected to be completed in the second quarter of 2022, prior to the anticipated conclusion of Reliance 1 and Reliance 2, the adjunctive NDD studies, which I will discuss momentarily. This MBD monotherapy study is for individuals who are diagnosed with depression and are not currently taking standard antidepressant therapy. Importantly, conducting REL-3 as a phase 3 study may meaningfully reduce the time for a potential approval of REL-1017 as an MBD monotherapy. In addition, in order to support potential regulatory submission seeking approval for REL 1017 as a monotherapy as well as a junkie treatment, the FDA confirmed that based on what is known at this time, REL NADA will not be required to conduct a two-year carcinogenicity study of REL 1017 with an understanding that sufficient preclinical safety data has been generated to the The FDA also confirmed that RealMata does not need to conduct a TQT cardiac study in humans to support cardiac safety in a potential regulatory submission for REL 1017. The data provided to date, as well as the data to be generated from the Phase III program, will be adequate to evaluate and confirm the cardiac safety profile of REL 1017. Moving on. I will now provide an update of the ongoing Reliance 1 and Reliance 2 studies, each of which will include 364 participants per study across 55 sites as well per study. As a reminder, Reliance 1 and 2 are designed to evaluate REL1017 as an adjunctive treatment for MDD, and both include two arms, placebo and 25 milligrams of REL1017. both of which are in addition to a standard antidepressant treatment for participants who have had an inadequate response to a minimum of one and up to three standard antidepressant therapy. The clinical trial protocol remains unchanged, with the primary endpoints being change in Madras score at day 28, and key secondary endpoints include the change in Madras score at day seven and the change in clinical global impression severity score at day 28, the CGIS. Both Reliance 1 and Reliance 2 are progressing with top-line data expected in the second half of next year. The Reliance Development Program also includes Reliance OLS, a long-term open-label safety study that is enrolled in both rollover participants from all three PIVOTR studies, as well as the NOVA participants. Reliance OLS is ongoing and enrolling participants is planned. Data from this long-term open-label safety study will be part of the NDA filing package. As we look ahead to the key reliance clinical development program, the catalyst I outlined earlier, It is important to know that we are highly confident that we have more than sufficient power in our studies to demonstrate the desired effect and targeted decrease in MADRA score improvement. Of significance, while REL1017 demonstrated an eight-point improvement score to placebo in the Phase II trial. Moving on, our second PAP study evaluating REL1017 versus intravenous ketamine, which has an established as an effective positive control is ongoing. Based on the current rate of recruitment, we expect top-line results from this study in the first quarter of 2022. As a reminder, in the third quarter, we announced positive top-line results from our first HAP study, evaluating Weld 1017 versus oxycodone 40 milligrams as an active control. As we discussed this data at length on our last two investor calls, I won't go into too much detail here. However, I will reiterate that this study was designed in a manner that followed the FDA 2017 guidance on the assessment of the abuse potential of drugs. Topline results for the primary endpoint showed that all three doses of REL1017 evaluated in recreational opioid users demonstrated a highly statistically significant difference versus the active control drug oxycodone 40 mg. Notably, the highly statistically significant difference was confirmed between the active control and 150 mg of REL1017, which is the maximum tolerated dose and six times the proposed therapeutic dose. Other secondary endpoints, such as desire of taking the drug again, were consistent with those of the primary endpoint, demonstrated no evidence of any meaningful abuse potential. Importantly, these results are consistent with app study results that have been seen in other drugs that affect the CNS and which have been scheduled at classes four, five, or even unscheduled. I also wanted to take a moment to reaffirm the need for a new therapeutic option with the potential clinical profile than RAN1017 presents. Over 17 million individuals in the U.S. suffer from NPD, and the current options are limited in their ability to help these patients. Current antidepressant standards have significant side effects and can take up to four, six weeks to show efficacy. 65% of patients do not respond to their first antidepressant treatment, and 30% do not respond to any of the current available oral treatment. Furthermore, there are only three FDA-approved adjunctive treatments for major depression disorder, all of which are antipsychotic, which often can cause long-term serious side effects. It is evident that new treatment options are needed, and we believe the REL 1017 has the potential to make a difference for these patients and their caregivers. Is it a monotherapy or a junkie treatment? I will now pass the call over to Nagit for his review of financial, and we'll then touch on the recent poster presentation of the recently held Neuroscience Education Institute Conference. Please go ahead, Nagit.

Sure. Thank you, Sergio, and good afternoon, everyone. Today we issued a press release announcing our business and financial results. for the three months and nine months ended September 30, 2021, which I will now review. For the third quarter ended September 30, 2021, total research and development expense was approximately $34 million as compared to $11.2 million for the comparable period of 2020. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL 1017. Total general and administrative expense for the third quarter ended September 30, 2021 was approximately $8.7 million as compared to $5.9 million for the comparable period of 2020. The increase was primarily due to an increase in personnel costs, stock-based compensation, and consulting services. For the third quarter ended September 30, 2021, we recorded a net loss of approximately $42.6 million or $2.44 per basic and diluted shares and diluted share compared to a net loss of $16.9 million or $1.05 per basic and diluted share in the comparable period of 2020. Turning to the results for the nine months and ended September 30th, 2021, total research and development expense was approximately $65.3 million as compared to $21.1 million for the comparable period of 2020. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL 1017. For the nine months ended September 30, 2021, general and administrative expense was approximately $26.2 million as compared to $18.8 million for the comparable period of 2020. The increase was primarily due to increase in personnel costs stock-based compensation, and consulting services. For the nine months ended September 30, 2021, we recorded a net loss of approximately $91.4 million, or $5.36 per basic and diluted chair, compared to a net loss of $38.7 million, or $2.52 per basic and diluted chair, in a comparable period of 2020. On September 30, 2021, the company had cash and cash equivalents and short-term investments of $88.1 million, which compares to $117.1 million on December 31, 2020. I'll now hand the call back over to Sergio for further remarks on our most recent progress. Sergio?

Thank you, Magid. Earlier this month, meaning last week, we presented a total of eight posters at the NEI Congress. including three posters with new data sets resulting from post-hoc analysis from our Phase II trial. First, the post-hoc analysis of the Symptom of Depression Questionnaire, the SDQ, total and subscale scores from patients treated with REL 1070 showed improvement in subscales of cognition, motivation, anxiety, irritability, and sleep functions. signaling that benefits from REL1017 may extend well beyond just mood improvement. This data suggests that REL1017 may have potentially meaningful implications for patients' working and social abilities. A second poster included a post-hoc analysis of a subset of MDT patients experiencing dissociative symptoms prior to treatment. showed a clinically meaningful improvement in the clinical administered dissociative state scale scores, which is used to measure dissociative state after REL1017 treatment. This suggests that REL1017 may not only be exempt from generating dissociative symptoms such as other NMDA antagonists, but it may actually be beneficial in patients affected by such symptoms. Finally, while some of the current standard of care antidepressants have shown an increase in lipid metabolism abnormalities with patients with MDD at risk, a post-hoc analysis showed that REL1017 did not significantly alter lipids, potentially lacking in cardiovascular risk. In summary, REL1017 development program remains on track, and we expect key data catalysts in each quarter next year. To reiterate, we expect top-line results from the second half study, this one assessing BREL-1017 versus intravenous ketamine in the first quarter, followed by top-line data from the Reliance-3 monotherapy trial in the second quarter. In the third and fourth quarters of 2022, we expect top-line results from the Reliance-1 and Reliance-2 adjunctive trial, respectively. Importantly, as Megan noted, our robust R&D initiative is supported by a strong balance. In closing, I remain grateful to the RealMother team for their continued hard work and dedication to executing on our mission. I would also like to extend my sincere thanks to the participants and clinical partners involved in the REL 1017 clinical trials for their effort in advancing this important therapy to the clinic as expeditiously as possible. I believe we will now open up the call for questions, and operator, can you please open up?

Yes. If you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the 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. One moment, please, while we poll for questions. Our first question is from Andrew Tsai with Jefferies. Please proceed.

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

Well, thank you, Andrew, for the question. Look, on the data that we presented at the NEI last week, the old data set is out for publication at some point. It will be published, so all the details will be there. I would just summarize that the there is very marginal difference between primary and secondary endpoint. We can say they are very, very consistent. And they confirm that there is a slight difference from placebo that is totally expected from any CNS drug that affects the mood, especially with a massive dose of six times the therapeutic dose. but none of these data are inconsistent with the primary importance. It's just a confirmation. On your second question, the straight answer is no, we did not reach out to, we cannot reach out to the subject after they complete the study. We don't really know who they are at all. So in the hands of the site, so in respect of privacy, There are some questions that have been asked in the various questionnaires, unlimited questionnaires in the study. And we did look at the outliers without knowing who they are or why they were outliers. But what we have noticed is that the vast majority, there are really a single-digit number of outliers. So it was not... how can I say, was not an extensive likability score across the different set of subjects. There was only, I don't remember the exact number, but it was a single digit number of patients that for whatever reason they score high. We see that as a positive signal because though we cannot confirm, we don't, the study was not designed to detect or to show any antidepressant effect. But with over 90% of the subjects totally not feeling any likability and only a single digit number of subjects liking the drug significantly, we suspect that there was something in this patient that made them, in this subject, that made them like it in particular. We can speculate that it could have been that they were in a depressed state or they had withdrawal symptoms from dieting and psychological withdrawal symptoms and taking a massive dose of a rapid acting antidepressant that may have felt some benefit. I hope I answered your question. Yes, very interesting. Right. It is. Right. Thank you. Look, the phase three will answer all these questions extensively. Okay. And we look forward to the ketamine data.

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

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

Right.

Thank you.

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

Yes, this one I can give you a more straight answer. The statistical plan is the same, exactly the same, for all the three, Phase III, the two, adjuncting with the monotherapy. And it is designed to detect a delta of two points in the MAZA score versus placebo. So if we hit two points, delta, the study will be statistically significant. That's the way the statistic has been designed for all the three studies. Now, the reason of the two points, because rule of thumb, it's not like it's not in the FDA guidance, of course, but rule of thumb is that looking at all the approved products, two points as a monotherapy or even adjunctive is a clinically meaningful delta that potentially could get you an approval. There are a lot of other factors in the approval, but in terms of efficacy, I believe it was Professor Fava that published that two-point delta. It's clinically meaningful. Therefore, it should deserve everything staying the same. It should deserve an approval. For treatment resistance, therapy or depression that is not something that we are doing or we are looking at, one and a half point becomes the corresponded number for potentially getting an approval. Consider that in phase two we had eight point delta. So we left a lot of room and we wanted to be conservative. We know that phase three there is more variability, more patients, more sites, So we left some room for, you know, something doesn't go the way we like it. But if we show one-fourth of the efficacy that we have seen in Phase 2, it would still be statistically significant.

Okay, perfect. Thank you, Sergio.

Thank you, Andrew.

Our next question is from Yatin Suneha with Guggenheim Partners. Please proceed.

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

Okay. Well, thank you, Yatin, first for the questions. And it was very insightful. So the first question was, what has changed that we are you know, the monotherapy study has become a filing or a pivotal study. Well, we did not actually have a conversation with the FDA in the sense that, you know, we sent the proposal of, you know, make it a phase three, and we waited the traditional 30 plus 30 for the 60 days. That usually signaled that the FDA does not have anything in place opposed for moving ahead with the program, and that's what we did. So we waited until end of August, and then we didn't hear anything against from the FDA, so we made it to phase three. There was really not a lot of difference. The protocol is exactly the same. There was no change in the problem. The question is that what has changed that make us think to do a phase three instead of a phase two, two things. One was the feedback from the FDA on the two years carcinogenesis study and the TQT that showed that the FDA is somewhat comfortable with the safety and tolerability of the drug. And then the ABUSE, the HAB study in July that we do believe could have been an issue with the FDA to expand a trial to 350 patients, all outpatients. So we put together all this data and we took some risks that the FDA could have said, well, you don't have any efficacy data in the monotherapy. Stacey, we are now relatively comfortable, or comfortable, But there is no single data that shows that the drug has any efficacy in monotherapy, although we do believe that it's not very different from a junkie. And so that was the reason that we initially, we thought about doing a phase two and then a phase three. Then we saw the FDA relatively comfortable. We had the abuse data. They were perceived as they are very positive and took some little risk, but it worked. And so that's why we moved to we make it a phase three, a phase five study.

The second question was... It was on the ketamine, like the differences between the PROS study and this study to make sure that this time the ketamine and the placebo arm separate.

Oh, yeah, no, that's easy. The first failed or unsuccessful ketamine study, the reason was that oral ketamine ketamine, the bioavailability is very poor and did not work as a control. We had almost half of the patients, they were taking oral ketamine, they thought they were taking placebo in the qualification part of the study. So that didn't work. And now we are using intravenous ketamine. We kind of look at what Johnson & Johnson has done with with Spravato. So I believe it's 50 milligrams infusion over 40 minutes. That's kind of the standard. And that definitely works as a control. So there is no doubt that the control will work. And the study has been progressing nicely. Looking forward to the data. Yeah, on the regulatory, correct? Correct. Look, we're fast-tracked, so we are planning to do a rolling NDA. Usually, rolling NDA, you file the kind of standard, the CNC. Probably, we will file the old preclinical package. We haven't really decided the final studies for the Phase 3, but I do believe that the If they are not too far away, one from the other, it's probably worth to file your model for the Phase C and the F because we started together. Clearly, there is one and the other, then maybe we will file whatever we have available and not wait for the Reliance 2 and 3. It's a bit too early, but the plan is to do a rolling in the A, so we want the FDA to have enough time to review the more standard CMC and preclinical. So if there is anything that they would like us to do more, we will have time. We won't delay the NDA, final NDA.

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

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

Got it. Thank you so much.

Sure. Our next question comes from June Lee with TruSecurities. Please proceed.

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

Thank you, June. I knew that this question would have come up. Of course, we look at the data that has been released two days ago. We only know what there was in depression. There's nothing more than that. The straight answer is that no, we have not seen any suicidal ideation in any of our studies. We do believe that NMDA antagonists, they actually, they're supposed to reduce the suicide radiation. If you look at, there is another, our competitor that is working on a nasal form of ketamine, and they are running the trial as a suicidality ideation reduction. So NMDA antagonists, they are specifically, they are supposed to be specifically indicated for reducing the risk of suicide. Now, the program that showed the side effect, an increase in suicidality. Look, it's, you know, when you, it is a 5H2A illness, right? And if you remember, and I do, because I was, I spent six years on the development and launch of Prozac, right? Fluoxetine, that is a reuptake of serotonin. And the, you know, the issue, one of the, it was a black box. of serotonin it's treated out of it so it's a it's a totally different mechanism of action yeah look it's all speculative i really really don't know it's 5h2a versus vf8 so it's all it's all speculative but you know if there is an explanation this could be this could be one with that said we look into we spoke with a few right specialists when you take such a high dose of psilocybin, and these are not drug abusers, right? These are patients with depression, so they don't want to have, you know, the, I don't know how to call it, like the psychotomatic trip, right? It's not something that they enjoy. If you are heavily depressed and you have treatment-resistant depression, you take a massive dose of psilocybin, you know, for more than a few minutes, you are totally confused. That's why, you know, it's an in-clinic, treatment so if you are depressed and you're you know you're in the start of confusion you may you mentioned suicidality but you know i would not read too much into that momentarily and i believe it was you know just initial right after during the acute phase so it's way too early to speculate

But your phase two was also inpatient, monitored for two weeks, but you saw no suicidality in spite of being an inpatient study.

Yeah, no, we have seen nothing at all. Okay. No issues with suicidality.

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

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

Oh, no, no. You know, how is it used by the physicians, the STQ, or is it purely an academic metric that's used?

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

Yes.

So we tried to split it into different endpoints and they got back to us and said, well, you know, if you are okay with the Madras, of course you would be okay with the CGI, right? So don't play, I mean, we're not playing, but it's that, you know, They are strictly correlated. SPQ is not strictly correlated, so it has some meaning. You have to be, you know, they have good results on the madras.

All right, well, thank you so much. Yeah, thank you. Yeah, yeah, that's pretty good. And looking forward to all the data every quarter next year. Thank you. Thank you.

Our next question is from Andrea Tan with Goldman Sachs. Please proceed.

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

It's a good question, by the way. Good afternoon, Andrea. That's our opinion. The FDA never commented upon this. If all the three studies are positive, we do believe that one monotherapy study would be enough to get an indication of delay. would be the only positive study, then I don't think that it's going to work. So we will have to run at least another one at the moment. That's our current thinking.

Got it. And then just wondering if you could comment on what you're seeing with enrollment in the Reliance 1 and 2 trials that's delaying the timing of those readouts. And in particular, do you see this in any way reflecting commercial dynamics that could play out if REL 1017 were approved?

You mean why it takes a little longer to complete the adjunctive? The most simple answer is the quality of the trial. We pay a lot of attention to the quality. We really want the patients to be surprised. There is a pretty high selection of the patient, meaning not selection that we don't know which patient will respond or not, but definitely we want to be sure that the patient is depressed, does not have personality disorder, or does not have anything that would not be an appropriate patient for an antidepressant treatment. And the failure rate from screening is about 50%. So one out of two patients is not enrolled because it does not qualify. So we are very stringent inclusion and exclusion criteria. Mostly focus on safety, of course, but focus also on being sure that we don't enroll everybody. Enrolling is very easy. If you want just to complete the study, you can do it very, very quickly, but that's not what we want to do. We want a study that would reflect the effect of the program or drug, and that it takes a little bit more time. The monotherapy is supposed to be a lot faster. We just started now in September, so we'll see what the ramp up is. But the inclusion and exclusion criteria are the same as an adjunctive, but the patient selection, there is more patients.

Got it. Thanks, Sergio.

Thank you, Andrea.

Our next question comes from Jay Olson with Oppenheimer. Please proceed.

Oh, hey, congrats on the progress and thanks for taking the questions. Maybe just to follow up on the recent competitor's results in TRD. Do you see any read across from that Compass Pathways study for psilocybin in TRD to your own? psilocybin program from ArborMentis. And can you maybe give us an update on the current status of that compound?

Yeah, sure, sure. Thank you, Jay. Nice to hear from you. The perspective, if there is any correlation, the straight answer is no. The base of our program on the psilocybin is totally different from pretty much every other competitor that works on psilocybin. We are not doing anything regarding psychiatry, and so now the question is neurodegenerative diseases, and we want to leverage our expertise on the neuroplastic effect of BDNF. And 5H2A agonist at the end of the cascade pretty much results in a similar neuroplastic effect, similar to an NMDA antagonist, So we want to leverage what we know and understand of that science in neurodegenerative diseases. And we use an enormously lower dose compared to the competition that works in psychiatry. And the base of that is that our scientists, I say we, but it's actually our scientists, do not believe that you need to get high or to get like a psychotomimetic whatever effect to have a neuroplastic or neuroplastogenic effect. So we go for much lower dose for a chronic treatment and not in psychiatry, neurodegenerative diseases. So there's no correlation between what the other companies are doing, what we do. The status, we work in the manufacturing. Believe it or not, it's... It is not the easiest compound to produce synthetically. And I don't know, Maggie, shut me up if I talk too much. But actually, we have designed and generated our own proprietary synthesis with the Prism Chemist. And so we are going through the manufacturing right now and dealing with the FDA. Of course, the the silo siding about the problem we are working on is two sets of is in two parts right one is the the molecule that's one we would like if the fda agrees especially because we use very low dose compared to the other players and we would like to leverage all the safety data there is pretty sizable package of safety for psilocybin, especially at low dose. And so, definitely if the FDA agrees, then theoretically the manufacturing will be completed, then theoretically we can go straight in phase two. Sometime probably the second half of next year. You know, honestly we are very busy with this massive phase three program of REL 1017. So thylosiding is going, but it is not a destruction. The real focus is 121017. It will be the focus after the phase three data, then we will focus on thylosiding as well. But the plan is to be able to do a phase two, start the phase two sometimes in the second half of next year when manufacturing will be done, and the FDA, if the FDA will agree to skip thylosiding, the preclinical and phase one, as we do believe. The second part of the program is derivatives of psilocybin. It's a new chemical entity, so that is full-fledged development. We are synthesizing now, but we will start in vitro. I believe we are doing some animal studies now. still earlier than the psilocybin and the psilocybin model. I hope I answered your question.

Yes, that's great. That's super helpful. Thank you very much. And maybe just one follow-up. Can you comment on what particular forms of neurodegeneration that you're thinking about studying when you initiate your Phase II trials?

Let me try. Let me try without... Yes, so we are focusing on diseases where there is damage of the nerves, of some nerves. I would say acute damage. So and if we are right and psilocybin is very safe and especially at the doses that we're using, potentially it could speed up the the recovery or limit the damage of the nerve or speed up the recovery if there is a way to measure the recovery. I would not say more than that. Also because we are discussing, though we will discuss with the FDA. We want to be sure that they are in agreement of what we want to do. But that's pretty much would be the plan. So more acute nerve injury and so attempting to reduce the damage and or improve the recovery time.

Great, that's super helpful.

There is more than one indication, of course. Acute nerve damage can happen for a variety of reasons.

Okay, so like spinal cord injury or stroke?

No, spinal cord injury, I've been involved 25 years ago. We'll never get close to that. Not spinal cord injury.

Okay. Okay. All right. Great. Thank you so much. Appreciate the additional color.

Thank you, Dave.

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

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

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