Relmada Therapeutics, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Roamata Therapeutics Inc. first quarter 2022 earnings call. During the presentation, all participants will be in a listening mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded Thursday, May 5th, 2022. I would now like to turn the conference over to Tim McCarthy, LifeSite Advisors. Please go ahead.

Thank you, Ingrid, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer Sergio Traversa and Chief Financial Officer Maggie Shenouda. This afternoon, Realmata issued a news release providing a business update announcing financial results for the three months ended March 31st, 2022, 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 Harbors 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 Realmata'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, 2021, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 5th, 2022. Realmada 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, as always. Good afternoon to everyone, and I'm pleased to welcome you to the Realmada First Quarter 2022 Conference Call. During today's call, I will review our recently achieved milestones and the anticipated timelines associated with the multiple expected clinical trial readouts for REL 1017. That is our lead product candidate that we're currently developing as an adjunctive and monotherapy treatment for patients with major depressive disorder, or MTD. Following my comments, Maggot Shenoud, our Chief Financial Officer, will review our financial results and balance sheet, and we will take then your questions. As many of you know, we expect 2022 to be a catalyst switch year for Remark. We intend to generate REL 1017 clinical data readouts beginning mid-year for the ongoing Reliance Phase III trial. Specifically, we anticipated completing the enrollment of Reliance III the ongoing monotherapy registration of phase three trial, followed by top-line data readout by mid-year 2022, and followed by top-line results from Reliance 1 and Reliance 2 receptors. These anticipated timelines remain unchanged from prior guidance. As a reminder, Reliance I and Reliance II are two ongoing Phase III sister two-arm placebo-controlled pivotal studies evaluating REL 1017-25mg as a potential adjunctive treatment for MDD. Reliance III is the ongoing Phase III two-arm placebo-controlled registrational study evaluating REL 1017-25mg as a potential monotherapy treatment for MDD. All participants in the reliance trials take a loading dose on day one of 75 milligrams, that is three tablets of REL-1017. We made significant progress in advancing our development program. To this end, in February 2022, we reported top-line data from our second CAP, or Human Abuse Potential Study, which compared REL-1017 versus intravenous catalysis. Our first HAP study comparing REL1017 versus oxycodone was successfully completed in July 2021. Most importantly, the findings from these two HAP studies were consistent and confirmed the 2019 DEA statement on esmetadone that states that the D-isomer lacks significant respiratory depression action and addiction liability.

We believe

The toxicodone comparative data significantly derisks the Schedule II potential for REL-1017. And then the ketamine comparison data significantly derisks the drug candidate Schedule III potential. As we have said previously, we believe that the data generated today from our ongoing development program indicates that REL-1017 could be initially proposed as a Schedule V drug, with potentially to eventually a non-scheduled drug following one or two years of marketing experience. Moving on to the current status of the Phase III program, we continue to anticipate the completion of enrollment in Reliance III, the ongoing monotherapy registration of Phase III trial, followed by the top-line data readout by MDF. Reliance 3 aims to randomize up to 364 patients who have been diagnosed with depression and are not constantly taking a standard antidepressant. The study includes two arms, placebo and 25 mg of Rel1017. Patients may have tried no more than one standard antidepressant in their current major depressive episode to be eligible for the study and have to be off treatment for at least the 30 previously dates. Conducting Reliance 3 as a Phase 3 study could meaningfully reduce the time for a potential approval of REL 1017 as an MPD monotony. Let me now provide an update on the ongoing Reliance 1 and Reliance 2 studies, each of which is designed to include up to 364 participants per study across 55 sites per study. Reliance 1 and Reliance 2 are designed to evaluate REL1017 as an adjunctive treatment for MDD, and both include two arms, placebo and 25 milligrams of REL1017. Both arms are studying the use of REL1017 in addition to a standard antidepressant for participants who have had inadequate response to at least one and up to three standard antidepressant therapies. The primary endpoint is the change in MADRA score of the drug versus placebo at day 28. Key secondary endpoints include the change in MADRA score at day 7 and change in the clinical global impression severity scale, the CGIS score, at day 28. Day 28 was chosen as a primary endpoint in agreement with the FDA. with an understanding that depression is a chronic disease and that day 28 will support REL 1017 as a chronic treatment. Both Reliance 1 and Reliance 2 are progressing as planned, and we continue to expect the availability of top-line data in the second half of this year. The Reliance development program also includes Reliance OLS, the long-term open-label safety study that is enrolled in both rollover participants from all three Pivotal studies, as well as the de novo participants. Reliance OLS is ongoing and continues to involve participants as planned. Data from this long-term open-label safety study will be part of the planned NDA filing package. As RAD 1017 development program advances, we continue to expand our senior team to this end, I'm very pleased to report today that we appointed Gino Santini as Corporate Development Strategic Advisor. He's a veteran global biopharmaceutical industry executive with strong P&L experience that demonstrated value creation skills. Gino has a successful track record in both operational and strategic role, worked in three different continents and in various areas of the pharmaceutical value chain. He is a former member of the executive team Eli Lilly, most recently as president of U.S. operations and SEP of corporate strategy and business development. He has a broad global network in the pharmaceutical, biotech, VC, private equity, and investment banking communities. He retired from Lilly in December 2010 after a career of 28 years. Gino currently serves on boards of multiple public and private biopharmaceutical companies. I also would like to highlight that REL1017 data were presented last month in two-poster presentation and one oral presentation of the ketamine and related compound international hybrid conference 2022. In addition, REL1017 preclinical all-natal lesion data were recently published in the peer-reviewed journal Frontiers in Pharmacology. This compelling data confirmed that REL1017 does not produce only lesions, unlike what has been seen in other NMDA blockers. In REL1017, treated RADs, early only lesions, which usually appears one day after treatment with NK801, that is another NMDR channel blocker that was used as a positive control in the study, were not observed. These results further contribute to the safety profile of REL1017. Finally, I would like to highlight that May is Mental Health Awareness Month, which serves as a reminder for us that why we are so, or why we are so passionate about advancing our coalition at RealMada. To mark the occasion and increase visibility around mental health, we are participating in a number of initiatives this month, including sponsoring the 33rd Annual Lifesaver Gala 2022 that is hosted by the American Foundation for Suicide Prevention. Several members of our team will be participating in local walks sponsored by the National Alliance on Mental Illness. With that, I will now turn the call over to Maggot for a review of the financial. Maggot, the stage is all yours.

Thank you, Sergio. Today, we issued a press release announcing our business and financial results for the three months ended March 31, 2022, which I will now review. For the first quarter ended March 31, 2022, total research and development expense was approximately $25 million, as compared to $14 million for the comparable period of 2021. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL 1017. Non-cash R&D expense for the first quarter of 2022 amounted to $1.3 million. Total general and administrative expense for the first quarter ended March 31, 2022, was approximately $13.3 million, as compared to $8.4 million for the comparable period of 2021, an increase of approximately $4.9 million. The increase was primarily due to the increase in stock-based compensation. This non-cash charge totaled $10.7 million in the most recently completed first quarter. For the first quarter ended March 31, 2022, we recorded a net loss of $39.7 million or $1.40 per basic and diluted share compared to a net loss of $22.2 million or $1.34 per basic and diluted share in the comparable period of 2021. As of March 31, 2022, we had cash, cash equivalents, and short-term investments of $220.6 million compared to cash equivalents and short-term investments of approximately $211.9 million at December 31, 2021. I will now ask the operator to please open the call for questions. Operator?

Certainly, thank you. If you would like to register a question, please press the 1 followed by the 4 on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. One moment please for the first question.

Our first question comes from the line of Andrew Tsai with Jefferies.

Please proceed with your question.

Thanks for taking my questions. The first question is, actually on the kinetics of the phase three monotherapy data coming out. It also applies to adjunct studies. So I guess my question is, you know, how do you foresee the curves to look like, you know, for S-Methoda in particular, as well as placebo from day seven to day 28? You know, should we be expecting no kind of rebound in terms of the efficacy? Or is some rebound actually okay in your view? Thanks.

Well, thanks, Sergio. Let me take this one. Well, of course, we don't have data, especially monotherapy. We don't have any data, not short-term, not long-term, but we have very strong adjunctive treatment data, and we have experience, so we have data from other compounds that also work on the NMDA channel. So just based on what we have seen for phase two, and based on what is the experience from other similar compounds, we don't expect any loss of efficacy over time. Based on the mechanism, if we do believe the neuroplastic effect, then longer term, the efficacy of the drug should just improve. We don't expect any loss of efficacy after day seven. We expect to be stable and hopefully better than they said. Right.

Okay, very good. And secondly, it's more of a high-level question, maybe more open-ended, is just, you know, I guess, you know, conceptually, you know, what do you guys think you've done for these phase three studies to maximize their product success? You know, what are you doing differently than the other companies with depression programs? Anything in the inclusion criteria or COVID protocols? you know, maybe something about the placebo response or even the drug effect. Any color would be great.

Well, thanks, Andrew. This one will take some time to go more in detail of what we have done. But, you know, top down, we have done everything it is possible to think about it to make the effect of the drug effective. to confirm what we have seen in phase two, without making too many strong statements without the data. But based on phase two, we do believe the drug is safe, is well tolerated, but also that the drug works, has a very strong efficacy. And so we don't see any reason why the drug should not confirm the same effect in the phase three program. What is the potential the potential risk of what everybody is afraid in every trial, but especially in depression trials, the placebo effect. So what we have been focusing on is everything is possible to do to control the placebo effect. That means the site selection, trying to get sites with experience in depression clinical studies, rater selection. The rater is actually trained by a company that is called CTNI. Hopefully I'm not making any publicity for anybody, but it is the company that administered the SAFER interview to the patient. At the same time, they trained the raters. And so from the site, the raters, looking at the profile of the patients that the SAFER interview that should support a patient selection that would exclude patients that are not affected by depression, and to support or be sure that the patient is compliant, that the patient takes the drug. There's a little video that is uploaded every day showing that the patient is taking the tablet. reading a statement pre-every Madras interview that the patient has to read that states that they have 50% chances to be on placebo, a pattern that produces the placebo effect. And so, right, there is no magic. There is no magic bullet or magic strategy that can guarantee you the results. But we do believe that all we have done so far to support patients quality of the patient, compliance, and should support, right, a good control of the placebo effect.

Very good.

It's a long answer, but I hope I answered it. I wanted to answer it.

Yeah, I think it's important. And then the very last question is, you know, in addition to kind of monitoring for, you know, discontinuation rates and the rollover rates, which you've disclosed before, on a blinded basis, let's be clear, Are you looking at anything else on a blended basis? I don't know, total madras changes? And then are you able also to confirm the DMC committee is still seeing no signs of opiate or dissociative effects? Thanks.

Yes, I answered first the second question. It is easier. Yes, the DMC has not. From the last meeting of the DMC, and their statement to continue this plan, we have not heard anything different about any severe side effect or any change in the program. And, yes, the answer is yes. If there were anything that would suggest to change something in the study, that would also mean if there is withdrawal symptoms of anything that is unusual that would cause any risk for the patient, then we would have known. So we assumed that from the review there was no sign of any withdrawal effect. And the, remind me of the first question that I lost a little bit.

If you're seeing anything, right, if you're seeing anything else on a blinded basis, basically.

I'm not trying to avoid it. No, no, look, the blinded data, they are extremely useful for safety. then if there is no sign of any severe side effect, you assume that. We assume the placebo does not give severe side effects. Yes, it's nothing. So it's a fair assumption that the drug is safe and well-tolerated. On the efficacy, it would be highly risky to look at blinded data and to make any statement. Until you know what the placebo does, it's impossible to draw any conclusions. probably we would see if there is zero effect, right? If everything would be a zero, right? You assume that nothing is working, so the drug would not work. That's all you can tell. We don't believe we will see a zero effect, but that's not an indication of any final result. So we have to be a little patient here.

Understood. Very good. Fingers crossed, and thank you for taking my question.

My pleasure, Andy, as always.

Our next question comes from the line of Andrea Tan with Goldman Sachs. Please proceed with your question.

Hey, everyone. Thanks for taking my question. Sergio, maybe just two for you. Just curious if you could speak a little bit more on your estimates of the size of the monotherapy opportunity, and then do you envision positive data from Reliance III could prompt inclusion on REL 1017's label, or do you think you would need to run an additional study and submit a supplementary filing thereafter?

Thanks, Andrea, and good afternoon to you as well. Thanks for the question. Well, moving forward in the next call, we will be probably a little more precise on the size of the market. And with Gino on board, one of the role of the help will be to give us guidance and help us in determining what the size of the different opportunities are. Now, monotherapy is very much related with the clinical data. That's where there will be the big difference, right? Because competition in adjunctive treatment, there is no antidepressant approved. The only three drugs are all antipsychotic. So that makes the task not easier, but definitely a little bit more favorable because, you know, if REL 1017 makes it to the market as an adjunctive treatment, that would be the only antidepressant available. And so there is going to be more price power and less competition directly. Monotherapy, the competition is generic 26, 27 drug with one exception that I believe is Tritalis. It's the only branded antidepressant left. And so price will be critical, price competition. price competition can only be overturned by one factor, is clinical data. If the data in phase three monotherapy would be even everywhere close to the phase two, then we do believe, I do believe we have a good chance because you go against drugs that have an effect size about 0.3 and they work in about 30 to 40% of the patients take a month at least. to show any efficacy. And they're not exempt from side effects. If the data, what we hope and we expect to be, that you have a drug that you take one tablet in the morning and it works after a few days, it is effective chronically. And it's effective in whatever we've seen in phase two. In non-responder to traditional antidepressants, response rate was very close to 60%. So six out of 10 patients responded. And that's going to be very difficult for payers to recommend as a frontline a traditional antidepressant. So the clinical data will really drive the size of the market. And price will be a very important factor. We'll be more, like, towards the next few months, we'll be more closely with the payers And we will have a better understanding of what they want to see to put REL 1017 as a frontline therapy, even as a reimbursement. I hope I answered your question.

Perfect, Sergio. And then on the second part, just if you, I guess maybe based off of initial conversations with the FDA, if you have an idea whether you would need to run an additional study there, or if this could be, you know, somehow grouped into an existing label for the adjunctive use case.

Yeah, this, well, to be direct, we did not address with the FDA this aspect. The FDA was in line with running a Phase III instead of a Phase II, so that could be read as a positive indicator. But again, the data will drive. The data will be compelling. We don't see any reason why we should have to run a second monotherapy trial if the two adjunctive trials would be positive, right? We go to the FDA with three trials with compelling data, positive, plus the long-term safety and that doesn't show any issue. We've kind of seen that the potential or the risk for abuse doesn't seem to be there at all. So that would make a very powerful package for the FDA. So yes, if everything goes the way we hope and we think, the three trials will be successful, we won't see any safety and risk, then we assume that we won't have to run a second Phase III monotherapy trial. We don't think we'll add any more information of what is already available.

Great. Thanks, Sergio.

Thanks, André.

Ladies and gentlemen, as a reminder, to register for a question, please press the 1 followed by the 4 on your telephone keypad. And our next question comes from the line of Yatin Suneya with Guggenheim Partners. Please proceed with your question.

Hey guys, thank you for taking my question. I have a couple very quick ones. First one is, can you just talk about how you might be modeling the placebo rate, given that this is now outpatient versus the inpatient that you conducted, and what your expectations are over the four-week time frame? Because in your study so far, we've just seen two-week data. So that's the first question.

Sure. Let me ask you the first one and then give you the line and you can ask the second one. The placebo effect, right, that has been a critical topic that we have really thought about from every different angle. Let me give you the numbers that we thought about putting into the statistical model. So in Clinic, inpatient treatment, they tend to have a higher placebo effect. So there is an advantage in running an outpatient trial the way we are doing with the Reliance program. At the other side, our phase two was seven days treatment. So placebo was taken for seven days. Placebo tend to have a gradual increase over time for a variety of reasons. So we do believe that these two factors, they balance themselves, right? If you look at the placebo effect in phase two, if I remember correctly, eight points after seven days, that's a pretty high placebo response. We have seen a number in other trials that go from four, five, six. So they tend to be lower in an outpatient setting. So the inpatient played a role and the placebo effect was higher than in outpatient. In the assumption that now we have a trial with four weeks, I'll give you a number. In the statistical plan, we assume that the placebo will be 12 points. So if the placebo delta from baseline to day 28 would be 12 points, then with the assumption that REL 1017 will behave and perform the way it has done in phase 2, then the trial would be highly successful. Anything below 12 points delta from baseline for placebo to day 28 would be I don't know what kind of term I should use, but it would be a very, very, very successful trial. If the placebo performs from baseline above 12 points, it depends. If it is 13, 14, it's still manageable. We do believe the trial will still be successful. If it is above 15, I don't see much. I haven't seen these numbers. But if the placebo is above 15, then we have a problem. So you can assume that 12-point delta from baseline to day 28 for placebo is the key number to look at. If it is below that, the trial would be highly successful. If it is slightly above, it would still be successful.

Got it. Very good. Thank you very much. Then can you confirm if patients in all three phase three studies are receiving a loading dose? And what is that dose? Is it the 75 milligram dose and then they go into 25 dose? And then also, can you maybe just talk a little bit about, specifically about the pharmacology that requires a loading dose if you are using? Sure.

I'm happy to do that. Yes, the answer is yes. All three studies are taking the loading dose. I do believe that also for new patients, also the long-term safety study starts with the loading dose. It is 75 milligrams in three tablets. And I'm happy to share that even taking three tablets the first day, we have seen nothing from a serious severe or side effect that is confirmed by the discontinuation of the dropout rate that is well below the average for a depression trial. So it's well below 10%. And so you have over 90% of the patients that complete day 28. And we have seen a pretty low dropout rate even in the long-term study. We have now patients that have been taking the drug for well over six months, and the dropout rate is very low in the long-term safety study. So going back to the loading dose, it's been very well accepted. The pharmacology is very simple. REL1017 has a long half-life. It's between 25 and 30 days. 30 hours. That is a natural once a day therapy. It is highly binding to albumin, I believe, to the plasma protein. So that implies the bioavailability is very high. It's well over 90%. So we have no problem with absorption. The profile is very clean, very easy to handle, very small molecule. And if you take the regular dose, the steady state, is at day four or five. Taking the loading dose is shortening the steady state at day two or three. So that's the only reason there is the loading dose, to shorten the steady state at the plasma level.

Got it. Very helpful. Then just final question. This one just came from a client. And the question is, Do you have an opportunity to upsize any of these studies similar to what SAGE did, you know, if the blinded data are coming either below your expectation or different than what you might be assuming? Thank you.

That's a good question, and I don't have the direct answer. I would say no. No, I mean, up to 364 patients, I believe it's a big number. Let me ask you in this way. That is probably the best way to answer. If the drug does not work well with 364 patients, then definitely you have done something wrong. So we just don't see that going beyond that number would add any value.

Very well. Thank you so much. I really appreciate it. Thanks, Yatin, for the question.

And our next question comes from the line of Mark Goodman with SVB Lyrinc. He's perceived a question.

Yes, hi. Sergio, I've gotten this question a couple times, so I figured I might as well just let you answer it to everybody. I guess there's two of them. One is, if the monotherapy study is positive, And then one of the adjunctive studies is positive, but the other is negative. What do you do next? What do you need to do? What's your understanding with the FDA? Second question is, if the monotherapy is positive or negative, help us understand what kind of read-through that is for the adjunctive studies. What does it mean either way? Thank you.

Thank you, Mark, on the question. So the... The first question is if two trials are positive and one doesn't work. Well, if one mono and one adjunctive are positive, we will file. There are examples, and one is J&J with Spravato. They had five trials, three failed, two positive, and the patient population was, or the trial design was not the same as they still got approved. So, you know, ultimately... The difference between monotherapy and adjunctive therapy in the depression setting is not, it is different, but it's not critical enough that the FDA would not look. It's a lot, and a lot will depend on how the data will look like. If the third trial fails with a p-value of 0.51, that, you know, we do believe the FDA will take these aspects into consideration. So the data... are good and the failure is not a total failure, zero, that we just don't see how that can happen, then I think we have a good chance here with two studies.

Well, Sergio, have you spoken to the FDA at all about if the mono is positive and you have one of the adjuncts is positive? Has that been a discussion point and they were open to filing with that?

No. Well, you know, the FDA, for whatever I've seen in the last few years, my interaction or what I've seen with the FDA, they won't tell you anything until you give them the full data. And so they will never tell you or kind of indicating things like that. They will usually tell you, you know, go ahead and then we'll discuss at the time of the NDA. Okay. So, no, we have not discussed with the FDA, but that's normal. We won't expect any real guidance on that. They want to see the data. They're very data-driven. And, sorry, the second question was?

The second question was, if the first study is positive or negative, what kind of read-through does that help us? Like, help us understand what we would know better walking into the last two studies.

Yeah, so we have data as an adjunctive therapy. So that's when we feel comfortable, confident that we'll show good results, right, based on phase two and based on everything we have done to make the phase three to be a high-quality 2022 standard for depression. Now, if monotherapy is successful, then clearly would be a good indicator that at least the trials have been conducted appropriately. It's the same team, so they do exactly the same thing for all the programs. So I would read through a successful phase three monotherapy trial that the adjunctive could be similar successful. Now the question is what happens if the monotherapy fails? What can we do with that? Well, definitely it's not going to be a very positive signal, but also there is, in the adjunctive setting, there is another drug. So the only potential difference, we don't know. We will know it soon, but for now we don't know. If there is any synergy between a SSRI that by itself doesn't work well, but you add an MNDA channel blocker, then there is a synergy and you see it. the good result we have seen, then if the monotherapy fails, it would not mean much for the success of the adjunctive. So I can give you the summary, even if I'm a little biased, but if the monotherapy is successful, then clearly the good signal, good sign for a potential success of the adjunctive. If monotherapy fails, I would not draw the conclusion that adjunctive treatment will fail as well. The role of the non-satisfactory effect of the base therapy alone, the SSRI or SNRI alone, could be very different in a combination with an NMDR channel blocker. I hope I gave you the answer the best way I could. Yeah.

Thank you. Maggie, can you just give us a sense of what spending is going to be this year, whatever you can disclose?

Sure. We haven't given, you know, defined guidance, but you can target about $30 million to $35 million a quarter, Mark.

Thanks. Sure. Maggie, you always get the easy questions. Okay.

Our next question comes to the line of June Lee with Truist Securities. Please proceed with your question.

Good afternoon. This is awesome. On for June. Thanks for taking our questions. So I guess my first question is, you know, you saw strong durability in phase two. Do you have any plans to assess for durability of antidepressant effects in the ongoing phase three? And I have a follow-up question after that as well.

Thanks for the question. For durability, you mean beyond day 28, I assume. Well, after day 28, the trial becomes open-label. So we will have some moderate score numbers measured, but it is open-label. So for the FDA, that would mean nothing. And in general, it would not be like a very strong measure. a very strong data. Yes, we will have some data, but not that would be like a major indicator of anything. It's open label.

Okay, thanks. And then I guess sort of on business development.

Sorry, one more thing on that. The FDA has not required any efficacy data after day 28, so they're very happy with it. they consider day 28 as a long-term effect, chronic effect.

Okay, thank you. We'll keep that in mind. So I was going to ask about BD. Do you have any, you know, you expect any discussions with a potential BD partner once you have first positive phase three data, hopefully mid-year? Or is your plan sort of to just hold off on that until you have results from all the studies?

Yeah, the... Well, as you may imagine, we have been in constant contact with potential partners, and all the potential licensure partners, they won't start to do work on a molecule on the program after phase three. They know very well what we are doing, and they have done their own research. due diligence, we don't think that nothing will happen before at least the first phase three data read. But they want to be ready after the data. If the data is very good, it can be competitive. Then they want to already have the work done. But we have Gino on board now that he will be help us out on making this kind of decision. What I can tell you is that when a potential partner does real due diligence, it's a big distraction. It's not due diligence that takes a couple of days. We're talking about a two-month process, and we have done it. So right now, even if we want to, we won't have the bandwidth and the capacity to go through a serious due diligence process with any potential partners. I think we will postpone everything at least after the first phase 3 readout.

Okay. Thank you, Sergio. Thank you.

Ladies and gentlemen, as a reminder, to register for a question, press the 1 followed by the 4 on your telephone keypad. And the next question comes in line of Vamil Devan with Missoula Securities. Please proceed with your question.

All right. Great. Thanks for taking my question. So I think I'm the same. theme of most of the other questions, just trying to get ready for this data here coming up. So a couple of questions I have. One, I don't know if you have disclosed or you can disclose sort of the number of patients that you've screened for the various phase three trials or any sense of sort of the screen failure rate that you're seeing. I know you put a lot of steps in place here to get the right patients. I'm just trying to get a sense of if that's been successful or not. And then I'm also curious, as you mentioned, you don't have the phase two data in monotherapy. to kind of drive your powering assumptions. So can you talk about sort of what your powering assumptions are for the model therapy trial specifically and how it compares to what you've done for the adjunctive trials?

Sure. Yes, I've been, we have disclosed, these are not material numbers, what the screening failure rate It is in line with the industry. It is between 50% and 60%, depending on the period and depending on the trial. It is in line. We have an extra, as you mentioned, we try to be as more effective in selecting patients that are affected by depression as possible, and we use the The second line of diagnosis, we use the safer interview. And the safer interview, depending on, again, time and different trial, the further failure rate, meaning patients that get to safer but they are not randomized, it's another 10% to 20%. So you can assume that out of 100 patients that get selected and go through the screening process, about 35 to 40, they make it to randomization. That is in line, but we'd say it's probably a little bit below the industry average. There's not a lot of data published, but we got that from our CO. And so we're pretty strict in terms of selecting patients. But failure rate is 50% to 60% first round, and another 10% to 20% in the second round. The second question is on the powering of the monotherapy. Well, we did not really have anything to look at directly in monotherapy, so we took the way of just assuming the same assumption we did for the adjunctive therapy. So the statistical plan, they are exactly the same.

And we do believe it's a fair assumption.

Okay, and I think just to confirm, I think you said... The powering is based on sort of getting a two-point separation in combination, is that correct?

Yes, that's correct. So if the delta between drug and placebo, day 28, is two points on the MADFAR scale, the study will be statistically significant. Okay, maybe just one... Yeah, I was going to just follow up on that.

Do you have a threshold, say, for what you think would be really sort of clinically meaningful? Results that you're looking for maybe beyond the two-point separation in either model?

We have to say what the industry and the FDA and the KO tell us. The two-point, it is clinically meaningful. It is going to change the way depression is treated. If we show two-point delta, probably not. It would be another antidepressant. It would probably be approved. It would probably be used. but it's not going to be like what we are hoping to do to change the game changer in the treatment of depression. Those two points won't make it. Three points and above, that would be different. That would make a big difference. So the standard two points, it is considered clinically meaningful. We do believe that for what we hope to do and we expect,

three points in the bulk would be much better, much more clinically meaningful. Okay. All right, great. Thanks for taking the questions. Thank you, Emil.

And our next question is from the line of Jay Olson with Oppenheimer. Please proceed with your question.

Oh, hey. This is Matt on for Jay. Thanks so much for taking our questions. So, the first thing we were wondering about, I guess, is just on any physician feedback that you might have received already on the HAP studies from the recent Ketamine and Related Compounds Conference. I'm just curious if some of that feedback includes how they view the safety and tolerability and abuse potential profile of REL 1017 versus generics or other NMDA antagonists in development. And then secondly, we were just curious, similarly, if you've received any feedback on the publication on the only lesions in preclinical data. And as a corollary, if you're doing any scans in the phase 3s, the phase 3s on human patients to detect any brain imaging abnormalities, that would be interesting as well. Appreciate that. Thank you.

Sure. Thanks for the question. So the first question is the feedback from physician on the human abuse potential study. The answer is yes. We got a very, very confident feedback from KOLs and from whoever understands this data. And one thing is that I can share is that nobody was really surprised by this data. The DEA has already made up their mind and they make it on their website. So the data we generated just confirmed what was already known by the abuse, what you can call the abuse community. And so nobody got really surprised by this data. But definitely the feedback has been very positive. It's been confirmed that the risk of the potential for abuse is not there. So that's one. On the only lesion, that one was there was more interest than I thought. But there are concerns about the only lesion in the long-term use of an MMDA antagonist. This probably is the background that was created by M8801 that was potentially effective, but the toxicity was very high. So we've been... The feedback was very positive, that there is no risk of only lesions. Consider that REL 1017 has a very long history in humans through the racemic, that it means nothing in terms of efficacy and mechanism, but in terms of safety, can give some indication. It's been human for 50 years. at very high doses, much higher that we're using, there's been no report of any brain damage of anything or any long-term effect in that case. In the phase three, to my knowledge, no, we are not doing anything in term of MRI of any detection of brain damage. We don't expect any, there was no sign of any signal that there is a potential for brain damage. We actually hope, based on everything we have seen so far, and based on the neuroplastic effect, we do believe that there is a potential for an improvement of brain function and in the dendrite functionality and the dendrite connection. When there is a chronic stress, can generate some form of dendrite atrophy. So the brain tends to, if you look at the brain of patients that are affected by depression for, you know, all their life or for many, many years, and there is some morphologic change in the brain structure. So REL-1017 should show, you know, if the patient starts to take it regularly, early enough, it takes for long term, could potentially, and I use the conditional here because we don't have the data, but based on the mechanism, could potentially improve the brain functionality, not only not to damage it.

Okay, got it. That makes perfect sense. Really appreciate that. And the one other thing we were just wondering about, since it has not been asked yet, it's just the current status of the Arbimentis psilocybin compound. I'm just curious where that currently stands and any thoughts on next steps of development and potential indications. Thanks so much.

Yeah, sure. We keep a low profile on the psilocybin for a few reasons, but the main one is we are really busy with the REL 1017 program. But, you know, the psilocybin is moving nicely forward. I believe we are the manufacturing, finishing up the manufacturing process. I don't know if we disclosed it or not, but I'm going to disclose it anyway. We will make psilocybin with a proprietary synthesis, so we won't buy it. We make it ourselves, and it's economically, and you can have as much as you want, so it's much cheaper than buying from third parties. And so when that will be finished, then we will update the community on the next step. We are doing also a certain number of preclinical studies. And the goal of the preclinical studies is to show, and the FDA wants to see it, to show and confirm that thylosibine that is a 5H2A agonist has a neuroplastic effect as well. And so it's being currently tested in animals, I believe rodent, zebrafish, and I believe some form of fly. There are certain models that detect the neuroplastic effects of compounds. So preclinical, ongoing, and manufacturing. The big difference will be, and we will discuss with the FDA, what kind of information, if any information they want to see on the preclinical and safety of psilocybin. We're using a dose that is substantially lower than what everybody else in the psilocybin space is using, and we're using low-dose chronic And so that could play a role in our conversation with the FDA. And if the information is already available for psilocybin in terms of safety, they are sufficient, then, and I use the conditional again, then we may be able to go straight into a phase two. That would save a couple of years of time and would be a catalyst that we will have data probably 12 months after we start the phase two. But too early to make a big statement. We still have to see the results of the preclinical and finish the manufacturing and then discuss with the FDA. Probably we'll give an update over year end after the phase three readouts.

Okay, got it. That makes sense. Thank you very much. Appreciate you taking the question. Congrats on all the progress. Thanks for asking.

And our last question is a follow-up from the line of Yatin Sineja with Guggenheim Partners. He's perceived a question.

Hey, guys. Thank you for allowing the follow-up. Just quickly, can you provide a little update on the enrollment, especially on the monotherapy study? Just like where you are, how close to reaching full enrollment, and could you narrow the timeline on the data or the current guidance stance?

Yeah, thanks, Javi. Well, narrow the time on the data. We stay with the media, so I would not go more in detail than that reason that there are variables like the data cleanup, and so it's impossible to really give very specific like week or even month, so we keep like a month plus minus as a buffer. In general, it's actually going very well. We took some measure earlier this year and we brought on board an infrastructure that mimics the CRO. So we have our own medical liaison called MSLs. We have our own CRA, the Clinical Research Associates, and they all go to site and they follow the study very closely. And we do have also one or two people that do the data cleanup internally. So we want to be ready and try to speed up the enrollment and the data read as fast as possible. At the same time, I'm sure you agree, we look at quality first, right? Enrolling patients in depression is very easy. You can find as many patients as you want. but you know to find quality in terms of the enrollment it's a little bit more difficult and we totally focus on quality we want to get it right and the first time not the second but enrollment is going very it's going very well thank you there are no further questions at this time Okay, well, thanks, and in closing, closing statement, I am very grateful to the RealMada team for their continued hard work and dedication to executing on our mission. I also like to extend my sincere thanks to the participants and clinical partners involved in the REL 1017 clinical trials for their efforts in advancing this important product candidate through the clinic as expeditiously as possible. With that said, I wish to everybody and everyone a wonderful end of the day, and we'll speak soon for the next quarterly call. Thank you very much.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.