Relmada Therapeutics, Inc.

Good afternoon. Thank you for attending today's Ramada Therapeutics, Inc. First Quarter 2023 Earnings Call. My name is Forum, and I will be your moderator for today's call. All lines will remain muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. It is now my pleasure to pass the conference over to our host, Tim McCarthy, from LifeSci Advisors. Mr. McCarthy, please proceed.

Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer Sergio Traversa, Chief Medical Officer Dr. Cedric O'Gorman, and Chief Financial Officer Magid Shenouda. This afternoon, ROMADA issued a press release providing a business update announcing financial results for the three months ended March 31, 2023. Please note that certain information discussed in the call today is covered under the Safe Harbor Provisions 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 31, 2022, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 11, 2023. 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. As always, and good afternoon to everyone. I am pleased to welcome you to the REL MADA first quarter 2023 conference call. During today's call, we will provide an overview of our ongoing phase three program for REL 1017 in major depressive disorder. Cedric will provide a clinical review and update, and Magid will review our financial results and balance sheet. We will then take your questions. To begin, as we said on our last call, Based on the results from study 301, we intend to primarily focus on REL-1017 as an adjunctive treatment for major depressive disorder, or MDD. We have implemented clinical changes, critical changes to the ongoing study 302, a phase three two-arm placebo-controlled pivotal study, evaluating REL-1017 25 milligram, and we will initiate our new trial, study 304, for Adjunctive MDD. Our Study 302 protocol amendment was finalized and is now being implemented across all clinical sites. The new Study 304 protocol has been drafted and will be ready for study initiation by mid-2023. The full results for REL 1017 in Study 301 reinforce that the two most important drivers for study success are recruiting the appropriate patient with true MDD, and controlling for placebo response. REL1017, unlike the conventional monominergic antidepressant, acts by blocking the NMNDA receptor and correcting the consequences of dysregulated glutamatergic pathways believed to underlie the pathophysiology of MDD. It does not affect mood by altering neurotransmitter levels or independently of pathophysiologies. It is believed that REL1017 has no effect in the situation of depressed patients, so its efficacy signal is dependent on enrolling appropriate subjects with a true MDD pathophysiology and diagnosis into the trial. Since our last call, we have been focused on optimizing the design of our clinical trial for signal detection via the amendment of the study 302 protocol and via the drafting of a new streamlined study 304 protocol. Both resulting protocols have concentrated on recruiting appropriately diagnosed subjects, controlling placebo response, and enhancing signal detection. Additionally, we have been finalizing the selection of the preferred clinical sites and have been visiting these sites as we strengthen our relationship and collaboration with them on our clinical trials. I'm also pleased to report that the open-label one-year safety study for REL 1017, study 310, is concluding with all treatment visits completed and finally safely follow-up visits occurring in the next couple of weeks. Therefore, attaining the necessary long-term safety exposure required for the purpose of our NDA filing. We expect to release data from this study later this year. Before moving on to provide further detail on the clinical progress in our first quarter financial results, I would like to emphasize that RealMada is sufficiently funded to fully execute our plans to reach data readouts from both phase three trials. I will turn now the call over to Cedric, our chief medical officer, to go over the clinical progress in the quarter and provide an update on the plans moving forward. Cedric?

Thank you, Sergio. As Sergio indicated, we've now amended our study 302 protocol, which has been IRB approved, and subjects are already being screened under this streamlined protocol. The amendment has significantly lessened the burden to both subjects and sites by reducing required time spent by subjects at the site. This was achieved by removing duplicative assessments and evaluations that were of exploratory interest. The amended protocol capitalizes on our learnings from the completed control trials and optimizes the potential for reduction in the high placebo response seen in those completed studies. As you recall, when we analyzed the results of the 301 study, which failed to meet its primary endpoint, we saw in a post-hoc analysis of subjects from verifiable versus non-verifiable sources a striking difference. Verifiably sourced patients were defined as patients who were known to the sites, such as current patients, patients obtained from the site database, and healthcare professional referrals. All of these elements increased the confidence in these subjects having a confirmed diagnosis of MDD as contrasted with non-verifiably sourced subjects. Non-verifiably sourced subjects were those recruited through radio and TV ads, social media, via the internet and through recruitment agencies. We observed that reliably sourced subjects treated with REL 1017 had a change from baseline of 15.2 points on the madras total score at day 28 versus 11.8 points for placebo. This amounts to a 5.5 point placebo adjusted difference with a p-value of 0.016. From this post hoc analysis of our study 301 data, it is clear to us that in clinically depressed patients from verifiable sources, REL 1017 has a strong signal of efficacy. In the ongoing 302 study and the upcoming 304 study, we will require that patients coming from verified sources have documented evidence of their MDD diagnosis. We will require medical records from prospective subjects to verify MDD diagnosis, and antidepressant treatment history. Additionally, as you recall, two of our highest enrolling sites in the 301 study were particularly impacted by paradoxical data and high placebo response. When we excluded all data from these two sites, the population was reduced by only approximately 40 patients, and we saw a 4.1 point placebo-adjusted difference at day 28 on the Madras total score favoring REL 1017. These important post hoc learnings have allowed us to make site selection improvements and prioritize moving forward with those sites who were better able to control for placebo response. Moreover, we intend to limit the number of patients enrolled per site so no single site can have a disproportionate effect on study outcomes as was observed in the prior control trials. In the ongoing study 302, we are planning to enroll approximately 300 patients and currently expect that trial to complete in the first half of 2024. Currently, we have enrolled over one third or over 100 patients into this study. We plan to initiate the new study 304 in mid 2023, also with a planned enrollment of approximately 300 patients with completion anticipated in the second half of 2024. Additionally, as Sergio mentioned, our open-label one-year safety study for Route 1017, Study 310, is concluding with final safety follow-up visits occurring over the next couple of weeks, fulfilling the long-term safety exposure requirement for our NDA filing. We expect data from this study to be available later this year. As we continue to advance our ongoing Phase III program for REL 1017, we are also focused on further enhancing the trove of published and presented data in support of our promising late-stage product candidates. To this end, we have had two late-breaking posters accepted for presentation at the upcoming 2023 American Society of Clinical Psychopharmacology meeting, or ASCP, at the end of May. One presentation will highlight the per-protocol efficacy results from study 301. As a reminder, this was a pre-specified analysis. Per-protocol refers to the population of patients who were treated to day 28 and did not have major protocol deviations. This pre-specified analysis resulted in the exclusion of only 29 patients compared to the full analysis set. Per-protocol comprised 198 subjects. compared to 227 in the full analysis set. The change in Madras total score from baseline at day 28 was 15.6 points for REL 1017 and 12.5 points for placebo for a placebo-adjusted difference of 3.1 points and a p-value of 0.051, approaching statistical significance. The second presentation will review the safety results from study 301 specifically the lack of indication of abuse potential and absence of withdrawal signs and symptoms in the trial. There was no difference between REL 1017 and placebo treatment groups in terms of drug likability, abuse potential, and withdrawal effects. I will now turn the call over to Maggot to review our first quarter financial results.

Maggot? Sure. Thank you, Cedric. Today we issued a press release. announcing our business and financial results for the three months ended March 31, 2023, which I will now review. For the first quarter ended March 31, 2023, total research and development expense was approximately $15.9 million as compared to $25 million for the comparable period of 2022. The decrease was primarily associated with the completion of study 301 and study 303 in late 2022. The non-cash charge related to stock-based compensation totaled $2 million in the most recently completed first quarter. Total general and administrative expense for the first quarter ended March 31, 2023. It was approximately $12.3 million as compared to $13.3 million for the comparable period of 2022, a decrease of approximately $1 million. The decrease was primarily driven by a decrease in stock-based compensation. This non-cash charge totaled $9.4 million in the most recently completed first quarter. For the first quarter ended March 31, 2023, the net loss was $26.3 million, or 87 cents per basic and diluted share, compared with a net loss of $39.7 million, $1.40, per basic and alluded share in the comparable period of 2022. Net cash used in operating activities for the three months ended March 31, 2023, totaled $16.5 million, compared to $19.4 million for the three months ended March 31, 2022. As of March 31, 2023, we had cash, cash equivalents, and short-term investments of approximately $132.4 million compared to cash, cash equivalents, and short-term investments of approximately $148.3 million as of December 31, 2022. Based on our clinical development plan, our current cash position provides us with ample runway or through the end of 2024. We of note the conclusion of study 310, which Sergio discussed earlier, as well as completion of certain earlier stage studies will support the expected cash runway. I'll now ask the operator to please open the call for questions.

Certainly. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. Our first question comes from the line of Mark Goodman with SVB Securities. Mark, your line is now open.

I think so. To answer my question, this is really on the line for Mark. I'm just wondering, based on the current data from Reliance 1 and 2, Do you believe that four weeks is the right duration to move forward with another trial? And do you think a longer trial, like maybe four, five, or six weeks may have increased the separation? Thanks.

Thanks for the question. It's Sergio here. Cedric, I believe the question is for you.

Yeah, thanks for the question. And, you know, we have looked at that and looking at the trajectory of the improvements observed with drug and placebo. in the completed studies, we believe that if we can control placebo response and still see the trajectory of improvement with what essentially is a rapid-acting antidepressant through its NMDA antagonism, we think that four weeks is sufficient in order to separate and have a positive study. And also, we've got agreement with the regulatory agencies to pursue a four-week. So, we think that the best approach now is to pursue four weeks. And also, when you look at the per-protocol analysis and the other post-hoc analysis, per-protocol being pre-specified and the post-hoc, we believe that if we can control placebo response, four weeks would be of sufficient duration.

Got it. That's very helpful. Thank you.

Thank you, Seth. If I can add... If you look at the curve on the 301 data, it may be a little misleading because the placebo response in this trial was extremely high and unusual because it was characterized by a very early high placebo response. Usually, placebo doesn't behave like that. It should not behave like that. So on a normal placebo response rate curve, it would show that 28 days, four weeks would be like an appropriate response.

primary endpoint timeline hope we answer your question it makes sense appreciate the color thank you for your question our next question comes from the line of oi air with mizuho your line is now open guys um thanks for taking my questions so um i have two questions my first question is uh so you have uh you know i think you said you have completed selection uh for sites for the 304 studies. Just wondering if there's any overlap with the 302 studies. And I think you also indicated you're limiting the number of patients enrolled in each of these sites. Just wondering how many patients are you expecting to enroll at each of the sites? And how many sites are there with 304, if you can share that? And my second question is, I think previously you indicated that you would read out the data for the Reliance long-term safety studies in mid-2023, but now you're just saying 2023, just wondering if there's a change. Thanks.

Thank you, Cedric. I believe that also this question is for you.

Sure. So hopefully I'll hit on all the questions here. But the first one was about the selection of sites for 304 and whether there's overlap with 302. No, because we will be starting the 304 study mid-year and middle of this year. And so therefore, 302 is ongoing. And so they are unique sites. across the two studies. I think you asked how many sites per trial, and I think approximately 50 is a good guide. In terms of number of patients per site, we're going to make sure that we have a cap that doesn't allow disproportionate effect of any one site, but at the same time, we're not providing an arbitrary number on which they cap, but we are carefully monitoring the activities so that they don't outweigh the rest of the sites performing on the trials. And I think the last question was about guidance around data from the open label. We did say middle of the year. and the study is completing by the last follow-up safety visits occurring in the next two weeks. So then it's just a question of how quickly we can clean the data and get it to you. So I wouldn't say that we are changing our expectation there because we can still meet it just as soon as we clean the data and are able to generate the outputs. I don't know, Sergio, maybe you want to add anything there.

Yeah, no, I think that's fine. I mean, the study has been completed or is on its way to be completed in the next few weeks. So, you know, it's 600-plus patients, so there's a lot of data. And we want to be sure that, you know, we have a complete understanding of the data before we release them. And they will provide quite a bit of new data, so we want to do it appropriately. And it will be some time, you know, in the second half.

Okay, thank you.

Thank you for your question. Our next question comes from the line of Andrew Tsai with Jefferies. Andrew, your line is now open.

Okay, great. Thanks. Good afternoon. Thanks for taking the questions. Great job getting things up to speed. And so first question is maybe a holistic high-level question for you guys. You know, at this stage, would you say how are you balancing quality of patients and sites versus getting the data as fast as possible for investors? Are you kind of operating in such a way that you are not taking, quote, unquote, no shortcuts whatsoever? So it's a high-level question to start.

Yeah, I'll give you the top down and Cedric can expand and give his opinion as well. Just in light of the experience that we had with the other two studies, clearly quality is the driver. And of course, we have to consider time too, because the studies have to be concluded on a reasonable amount of time. Let's put it in this way. plus minus three months, we don't think that would make a difference for investors. And as long as the results of the study will be positive. And Cedric, do you want to add?

Yeah, I would just echo what you said, Sergio, in terms of the focus being on quality, not on speed. And I think that quality sites have been selected based on what we were able to learn from those sites that did a better job of controlling placebo response versus not. And also the sites that did a better job at being able to verify, confirm diagnosis, and get the right patients into the trial versus the more unverifiedly sourced patients. Also, we're applying a really rigorous eligibility review process now. So as a result of that and requiring medical records, it obviously slows down the rate somewhat in making sure that we don't sort of cut corners here and that we really get the most appropriate patients into the studies.

Right. Makes sense. And so another thing that just came to my mind is I think last time you showed maybe a subgroup analysis where patients, you know, how patients perform differently pre and post COVID. So it made me think what if there was a new coven variant later this year knock on wood, if that were to happen, what would you do for your study would you put kind of pause enrollment. Just would be curious to gauge your thinking here, thank you. Cedric would you mind.

To take it.

It's a very interesting question. What I can say is that obviously post-pandemic lifting of restrictions saw a much better effect and separation for drug versus placebo. And the impact of COVID-19 across numerous trials has been documented already. It wasn't just our study. So it's a valid concern, but I would also say that there are other aspects in the analysis that we did which showed a more profound effect when you considered the verified patients with confirmed diagnosis versus unverified. Even the per-protocol, pre-specified analysis showed that there was good retention throughout the entire study. We have very low discontinuation rates. REL1017 has a particularly placebo-like side effect profile. And this is really, in two senses, it's aided continuation through the study. And in the other sense, often trials somewhat paradoxically benefit from this aspect of functional unblinding. It would appear that patients truly cannot distinguish between drug and placebo. That's my interpretation of the data that I've been looking at. So if there was a pandemic, I think we'd have to look at that closely. I'm hoping that we're past that now, and that's the importance in getting this done. The studies are up and running right now, and the new study is set to start. So let's hope we don't have another COVID pandemic.

Right, yes. Okay, very good. Thanks for the update. Thank you, Andrea.

Thank you for your question. Our next question comes from the line of Andrea Tan with Goldman Sachs. Andrea, your line is now open.

Hi, everyone. Thanks for taking my question. Two for me, please. First, with respect to the open label safety study, I know you've spoken in the past about the potential to understand the real-world effect of treatment through that data set. Just given that these are patients who rolled over both from the failed Reliance 1 and 3 trials, just wondering if you could help frame expectations for that data read and how they should be interpreted within that context. And then secondly, just curious if a data monitoring committee will be utilized in 302 and 304 with respect to recommending early stoppage of the studies similar to what was done for 301. Thanks so much.

Thank you, Andrea, and great question. I believe Cedric is to advance, sir. Cedric.

Sure, thank you. So the open label study, you're absolutely right, Andrea. It really does reflect how patients might get the drug and medication in the real world, and it can provide very important information regarding response, durability, continuation, tolerability of the drug. in the real world, and you have it up to 12 months, which is really nice long-term exposure. It has quite a number of subjects in the study, and as you point out, some are rollover from the completed 301 and 303, some are rollover from 302, and then you also have patients who came in de novo into the open-label study. And it also has a mix of monotherapy and adjunctive. So there are numerous sort of subsets that we look forward to parsing out and being able to share with you. So again, we'll have to see what the data is. And with the study completing the safety follow-ups, there'll be more to come on that. And then with regards to the safety, the data monitoring committee, We always both internally have a rigorous safety review process for all our trials, and we would continue to use the data monitoring committee. And with regards to potentially increasing the size of the study, that's certainly on the table for us to have a look at as well.

Got it. Maybe just one, sorry, one follow up on the considerations for increasing the study size. Maybe if you could just provide a little bit more color around that comment.

Go ahead, Cedi. Well, what I was going to say was we, you know, we haven't actually given any guidance about, you know, our, like, so take 304, for example, the protocol is in its final stages of development. And when that's finalized, the design will be shared and it will be up in clinicaltrials.gov. But I would be sort of hesitant to jump into detail around plans for interim analysis or upsizing the trial only because We haven't finalized design. We haven't spoken about our plans in that regard yet, so I wouldn't want to prematurely comment on that.

Okay, thank you.

Thank you for your question. Our final question comes from the line of Yateen Sumedja with Guggenheim Partners. Yateen, your line is now open.

Yeah, a few questions for me. Could you comment on your interactions with the FDA? Have you met with them and discussed these in amendment to the protocol of reliance to? And then, you know, so you made the modification. There are patients that were added before the modification. So how will the mixed data be analyzed? Just curious of the interaction or the agreement has been.

Go ahead, Cedric. So with regards to communication with the FDA, clearly we don't comment on specific interactions with the FDA, but we do have an ongoing dialogue with the FDA. And we certainly wouldn't do anything that didn't have the approval of the regulatory authorities on any of our plans or decisions moving forward. With regards to the question around the before and after the amendment, ultimately we will finalize the statistical analysis plan and submit that to the FDA. I won't comment on the specifics of our plan, statistical analysis plan, but having run a plethora of calculations and modeling around the first hundred patients in 302 versus expectations and assumptions based around the subsequent 200, we feel confident that if REL 1017 has a signal for efficacy, that this can be a positive study based on our calculations.

One more, if I may, and this is with regard to the onset of action. So if we look at the very first study that was done, the onset was pretty rapid, nice separation within a week. What has changed? Even in a subset analysis, when we take all the precautions and we do a post-hoc, the onset looks a little bit slower and the curves are not similar. So what's going on? Thanks.

Go ahead, Cedric. Okay, thank you. So I'm really glad you asked that question because you're absolutely right. In the phase two, the week one profound improvement with drugs was like 16.8 points compared to 8.8 with placebo. And we saw effect sizes of the order of 0.7 to 1.0. So that was an incredibly well-controlled inpatient Now, what we do know is that outpatient, while going from phase two to phase three is a challenge in itself, but then also the outpatient population is a little bit more difficult to control as we have seen from the various post hoc analysis that I've already mentioned. But what is striking in 301, for example, is that the majority of the placebo response happened in the first week. And so you're seeing an almost, ultimately the change from baseline with placebo in the 301 study was 12.9 points. And the vast majority of that had occurred by day seven. And in looking at the protocol, we were able to see that the screening visit was very, very long. The baseline visit was long. We had a day four visit, which was long. And then by day seven, when they came in, they were having another extensive visit on site and getting interaction with the staff. So I think that what you're seeing that's different is that the placebo patients were having what maybe is best described as a full therapeutic effect. And so all our efforts really are focused now on minimizing site patient interaction in that crucial first week. And I think that And what I'm hopeful for is that with the new amended protocol and the new study planned, you'll see less of a significant placebo change in that first week. It'll be more gradual, whereas the potential for REL 1017 to seem closer to what we saw in phase two, I'm hopeful that we'll be able to isolate that effect with this careful trial design that we've implemented.

Yeah, thank you, Cedric. And Yatin, if I can add a little bit of color. We have seen from like the data there now, we have a significant amount of data available. And REL1017 has like a marked effect when the patient is really affected by MDD, so really depressed patient. Looking at the data, clearly it shows that in 301, and the two studies that didn't work the way we would have thought and we were like the there were a significant percent of patients that were affected by other like situational depression and or not depressed at all or and so that you know the data have been kind of skewed in the in the opposite direction because of the you know patient selection uh we do believe that if we like the patient enrolled is a patient affected by depression, we should see an early response similar to phase two. Got it.

Got it. Very helpful. I hope we answered your question. Yeah, no, that's very helpful. One more question, if I may. Maybe Magat can comment on the expenses. You know, nice control on the R&D side. Curious how to think about the next three quarters and, you know, G&A is still a little bit higher. I would love to understand how that would shape up. Thank you so much.

Sure. Thanks for the question, Yatin. So with regard to G&A, I would expect it to stay in the $2 million per quarter range for the remainder of the year. So slightly up, slightly down, but on average around that. for the remainder of the year. And then we haven't really given R&D guidance, but you can think of the entire year as having a little bit more R&D spend on a quarterly basis in the second quarter, and then the R&D spend should start to moderate in the third and fourth quarter. We have trial startup spend in the third quarter, but all of this in around I would say the $15 to $16 million range per quarter. Very helpful.

Thank you.

My pleasure. Thanks for the questions, Yadin. Thanks, Yadin.

Thank you for your question. This concludes our Q&A session for today's call. I will now pass back to the management team for any closing remarks. Thank you.

Well, thank you. In summary, we remain confident that we have an approval drug, and then we have the right plan and the team in place to optimize the chances for success. We also believe we have the most reliable site identified and know how to identify the most suitable MDD patient, patient affected by major depression. We have greatly improved our study protocols, and also as a reminder, all other preclinical and clinical and CMC pieces are in place for a successful NDA filing for REL 1017. We are sufficiently funded to fully execute on our plans for REL 1017 development. We look forward to reporting progresses with study 302 and 304 throughout the remainder of the year. And in closing, I remain grateful to the REL team for their continued hard work and dedication to executing on our mission. I would like to extend my sincere thanks to the participants and clinical partners involved in the REL 1017 trials for the efforts in advancing these important product candidates through the clinic. Finally, we are grateful for the opportunity to continue supporting our advocacy partner in their Mental Health Awareness Month Initiative this May and appreciated the chance to support the important work that they are doing. That said, Big thank you to all the participants and everybody interested on the progress and on Ramada. And we'll update you the next development in real time. Thank you.

This concludes today's Ramada Therapeutics, Inc. first quarter 2023 earnings call. Thank you for your participation. You may now disconnect your line.