This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk06: Greetings and welcome to RealMada Therapeutics Inc.' 's second quarter 2023 EARNS conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operations assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Tim McCarthy, LifeSite Advisors. Please, Mr. Ching, go ahead.
spk03: 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 Financial Officer Magid Shenouda and Dr. Cedric O'Gorman, Chief Medical Officer. This afternoon, Elmada issued a press release providing a business update announcing financial results for the three and six months ended June 30th, 2023. Please note that certain information discussed on 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 violence. This conference call also contains time sensitive information that is accurate only as of the day of this live broadcast, August 8, 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.
spk10: Thank you, Tim, as always, and good afternoon to everyone, and welcome to the REL MADA second quarter 2023 conference call. I am pleased to report today that the ongoing phase three program for REL 1017 in major depressive disorder, or MDD, is proceeding as planned. I will first provide with you a brief update, followed by Maggie's review of our second quarter financial results, and then we will take your questions. As a reminder, REMADA is focused on developing REL1017 as an adjunctive treatment for MDD. As previously communicated, we have made critical changes to RELIASU, the ongoing 302, a phase 3, two-arm placebo-controlled pivotal study evaluating REL1017 at 25 milligrams for adjunctive MDD. The amended study 302 protocol continues to be implemented across all our clinical sites. The protocol amendment had significantly lessened the burden to both subject and site by reducing required time spent by subject at the site. This was achieved by removing duplicative assessment and evaluation that were of exploratory interest. The amended protocol leverages our learning from the completed control control trials from the Reliance Development Program and optimizes the potential for reduction in the high placebo response seen in these completed studies. As enrollment continues over the next several months, we will keep you updated on the trial progress. We are planning to enroll approximately 300 patients and currently expect that Reliance 2 Study 302 to be completed in the first half of 2024. Screening has commenced for the newly-initiated trial, study 304, which we named RE-LITE, that also has a planned enrollment of approximately 300 patients. Completion of this study is currently anticipated in the second half of 2024. Like Reliance 2, RE-LITE is a randomized, double-blind, placebo-controlled four-week trial evaluating the efficacy and safety of REL-1017 as an adjunctive treatment of MDD in patients experiencing inadequate response to ongoing background antidepressant treatment. The primary endpoint of both studies is the same, the change in the Madras total score from baseline to day 28 for REL-1017 as compared to placebo. has been designed to reduce the time spent at the sites and emphasize the quality of patient enrollment. We recently had successful investigator meetings with participating sites for both Phase III studies. During the investigator meetings, our team focused on providing intensive training on topics including appropriate subject enrollment, data quality, and strategies for controlling placebo response, and rater training. The open-label one-year safety study for REL 1017, study 310, has concluded with the attainment of the necessary long-term safety exposure required for the purpose of the MDA filing, and we expect this data to be available during the current quarter. As we continue to execute on the Phase III clinical development plan for REL 1017, we also remain focused on further enhancing the plethora of published and presented data in support of our late-stage product candidate. To this end, we will have a significant presence at several important scientific congresses over the next few months, including the presentation of multiple posters. We expect to present two posters at the 36th Annual ECMP Congress in October in Barcelona, among other scientific conferences in the second half of 2023. In addition, REL 1017 human abuse potential data were recently published in the peer-reviewed journal Translational Psychiatrists. Moving on, Maggot will provide a detailed review of our financial, but I would like to emphasize that RealMada remains sufficiently funded to fully execute our plans to reach data readouts for both Phase 3 trials, Reliance 2 and Reliance. I will now turn the call over to Magid to review our second quarter financial results. Magid?
spk04: Thank you, Sergio. Today we issued a press release announcing our business and financial results for the three and six months of June 30, 2023, which I will now review. For the second quarter ended June 30, 2023, total research and development expense was approximately $13.7 million. as compared to $30.9 million for the comparable period of 2022, a decrease of approximately $17.2 million. The decrease was primarily associated with the completion of Reliance 1, Study 301, and Reliance 3, Study 303 in late 2022. The non-cash charge related to stock-based compensation totaled $1.7 million in the most recently completed second quarter. Total general administrative expense for the second quarter ended June 30, 2023, was approximately $12.3 million, as compared to $14.6 million for the comparable period of 2022, a decrease of approximately $2.3 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 second quarter. For the second quarter ended June 30, 2023, the net loss was $25.3 million, or 84 cents per basic and diluted share, compared to a net loss of $39.9 million, $1.33 per basic and diluted share, in the comparable period of 2022. Turning to the results for the six months and to June 30, 2023. Total research and development expense was approximately $29.6 million, as compared to $55.9 million for the comparable period of 2022, a decrease of approximately $26.3 million. Again, the decrease was primarily associated with the completion of Reliance 1, Study 301, and Reliance 3, Study 303, in late 2022. The non-cash charge related to stock-based compensation totaled $3.7 million in the most recently completed six-month period. For the six months ended June 30, 2023, total general and administrative expense was approximately $24.6 million as compared to $27.9 million for the comparable period of 2022, a decrease of approximately $3.3 million. The decrease was primarily driven by a decrease in stock-based compensation. This non-cash charge totaled $18.8 million in the most recently completed six-month period. For the six months ended June 30, 2023, the net loss was approximately $51.6 million, $1.72 per basic and diluted share, compared with a net loss of $79.7 million for $2.73 per basic and diluted share in the comparable period of 2022. As of June 30, 2023, we had cash, cash equivalents, and short-term investments of approximately $118.5 million compared to approximately $148.3 million as of December 31, 2022. Cash used in operations for the second quarter was $13.3 million. Based on our clinical development plan, our current cash position provides us with ample runway through the end of 2024. Of note, this time period includes data readouts from both phase three trials, Reliance 2, that's study 302, and Relight, that's study 304. I will now ask the operator to please open the call for questions.
spk02: Operator? Thank you.
spk06: We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it might be necessary to pick up your handset before pressing star 3.
spk02: Our first question came from Mark Goodman, Lurking Partner. Please, sir, go ahead.
spk08: Hi, this is Rudy on the line for Mark. Thanks for taking my questions. Can you provide more color and enrollment progress for study 302 and what gives you the confidence that you can finish this study in first half 24? And also, can you remind us the powering of study 302 and 304? Thanks.
spk10: Yeah, sure. Good afternoon, and thanks for the question. We do have Cedric O'Gorman that is our chief medical officer that runs the all development plan, so I think he's the most appropriate to answer this question. Cedric, can you help?
spk09: Thanks, Sergio, and hi, Rudy. Thanks for the questions. With regards to enrollment, we're targeting 50 sites for both approximately 50 for 302 and 304. And so our efforts have been refocused on engaging, initiating, and making those sites active for screening and enrollment. So we have seen an uptick. We previously let you know that we were above 100 subjects randomized in the 302 study. And we've seen an uptick in both screening and randomization in recent weeks, and we'll give you an update further on that once we have more numbers to share. And with 304, we are now actively screening. I haven't got the first patient in yet, but so now we have two studies, phase three, adjunctive treatment of MDD, actively screening and enrolling. As regards to powering, we haven't shared powering assumptions on 302 or 304 at this point.
spk08: Got it. That's very helpful. Just a quick follow-up. You mentioned that you had hosted investigator meetings recently. Just curious what feedback you've got from investigators regarding your new protocol.
spk09: Go ahead, Sergey. Yeah. Oh, sorry, Sergio. Yeah. Yes, we held both remote but also in-person investigator meetings. And certainly the feedback from the sites has been a real gratitude and appreciation that people are able to get back and attend in-person meetings, which I think are really much more educational and illustrative. And the feedback on the streamlined amended 302 protocol, as well as the new, if you like, streamlined from the beginning 304 protocol has been really positive. both in terms of the feedback from the PIs and the study coordinators at the site level through these meetings that we've engaged with them on, but also we've had the opportunity for subjects to already randomize under the current amended protocol on 302, and we've heard directly from sites that it's moving much more efficiently, swiftly, and no hiccups, so it's going very well from a from a scale assessment perspective and from a data entry perspective, and we're very pleased with the feedback.
spk02: Got it. Very helpful. Thanks. Thank you. Our next question comes from Andrew Tsai, Jefferies.
spk06: Please, sir, go ahead.
spk07: Hi, y'all. This is AJ for Andrew. Thanks for taking our question. My first one is on a possible interim scenario. So I guess, first of all, would an interim look be possible? And if so, when would that occur and what could those outcomes look like? And then I have a follow-up.
spk10: Yeah, sorry, AJ. I couldn't hear the first part. So the first question is about the interest.
spk07: First question is just would an interim readout or some sort of interim look be possible?
spk10: I got it. Yeah, Cedric, I believe it's for you as well.
spk09: Thanks, Sergio, and thank you, Adrian, for the question. Yes, an interim analysis is certainly possible. We've looked at various scenarios of when we might consider doing that. We have included in the protocol an opportunity to do that as well. But in terms of giving granular detail at which point and what that interim would assess, we haven't disclosed that yet.
spk07: Got it. Got it. Okay. And then my second question would be on the drug effect for 1017. So, you know, 1017 has shown a pretty consistent mattress reductions across the studies. So, Is there a reason to believe that the advocacy in Reliance 2 and Reliance 4 could be even larger than what we saw in Reliance 1 and 3?
spk10: Cedric, why don't you try and then eventually I will pick it up if I have anything to add.
spk09: I was just waiting for you to ask me to answer that. But yeah, no, absolutely. I think that you're right, AJ. In terms of the change on the madras from baseline to endpoint, we've consistently seen a 15 to 17 point change on the madras. And you'll remember in the phase two, the effect size was 0.7 or above, depending on which scale you looked at. And in the 301 and the 303 studies that completed towards the end of last year, Obviously, it was hampered by a high placebo response of the order of 13 or 14 point change in the madras, 13 in the adjunctive 301, 14 in the monotherapy of 303. The vast majority of the placebo change occurred in the first week of both those studies. And so you're absolutely right. We believe that if we run a high-quality, well-controlled study where we try and limit the effects of expectation bias for subjects and placebo response, we could more align and get closer to what we've observed in phase two. So we're hopeful that if we do control placebo response and we believe we have the right sites and we're now enrolling appropriate patients that have documented medical records confirming their diagnosis and we're out of the pandemic, there's a lot of different variables here But we believe that, yes, in the ideal scenario, well-conducted trial, you'll see something closer to what we've previously observed in the positive phase two.
spk07: Got it. So it sounds like the underlying assumptions here are keep the drug effect the same, but lower the placebo.
spk02: Yeah, the drug effect has been consistent, yeah. Got it. Okay, thank you very much.
spk07: Thank you.
spk02: Thank you.
spk05: Our next question is from Yatin Saneha with Guggenheim.
spk01: Hi, this is Delma for Yatin. Thanks for taking our question. So just a couple from us. About the relight study, can you clarify if the primary endpoint will be measured at four weeks or six weeks? And if you discussed the protocol with the FDA, which feedback did you hear from them? And then I would just like to confirm if you already posted on clinicaltrial.gov any information about the relight study. Thank you so much.
spk10: Yes, sure. Cedric, you are in very high demand today. So I think you should take this one as well.
spk09: Yeah. No, no problem. Thank you for the question. And so with regards to Relight, yes, the primary endpoint in both Reliance One and Relight is the four-week change in the mattress total score from baseline drug versus placebo And of course, that's important to keep that consistent so that you can replicate the findings when it comes to determining efficacy. And as with all aspects of what we do in the R&D team and in our clinical trial design, we discuss everything with the FDA and make sure that our approach is appropriate and supported. So that is correct. And in terms of posting the records on clinicaltrials.gov, that will be imminent and within the expectations for compliance from a regulatory perspective with postings there. So you'll see that shortly.
spk01: Thank you.
spk05: Our next question is from Andrea Tan with Goldman Sachs.
spk00: Good afternoon. Thanks for taking my question. Cedric, maybe I'll stick with you and ask you one here. Just curious on the back of the FDA's CRL for Zoranilone for MDD, just curious if that changes anything in terms of how you're thinking about or approaching Reliance 2 and the Relight study. And then I have a second question.
spk09: Hi, Andrea. Thanks. Yeah, thank you, Andrea and Sergio. I don't think it really changes anything. I mean... You know, these studies were designed with FDA input all the way along. And so we know what the FDA is looking for when it comes to developing an MDT drug once daily, adjunctive agent. And I also think that, you know, our drug, if approved, would be a once daily treatment add-on. There's a lot of history and precedent for how one should develop these drugs to get approval. I think that our mode of administration and chronic ongoing treatment is quite traditional as opposed to maybe some newer agents which have a different type of therapeutic approach. I wouldn't, we're not particularly, we don't feel that there's any influence of the FDA CRL for Xeran alone impacting what we are doing.
spk00: Got it. And then can you also speak to what needs to be done ahead of the open label study reading out and any updated thoughts on the extent of data that will be shared?
spk10: Yeah, we're very excited about Sorry, Sergio, sorry. No, no, go ahead, go ahead. It's for you, Andrea.
spk09: Yeah, I was just going to say, Andrea, that we're very excited about announcing these data. Of course, when a study locks, then you just go through what's the extensive process of issuing queries to sites, cleaning the data, making sure that everything is accounted for and that you have a nice, clean package, and then you obviously deliver it to the statisticians who do their analysis and compute the outputs and the various things that you like to see when they're actually presented, when we present the top line. So as a reminder, we have fulfilled the ICH guidelines around drug exposure for safety and tolerability. The open label was a one-year study. So what that affords us is not only the required overall 1,000 subjects exposed, 100 for 12 months, 300 subjects at least for six months, but also over time you'll be able to see a picture of how open label, which sort of corresponds with real-world treatment, how patients manage to improve in the near term and then sustain their improvement in the madras score and in their depressive symptoms out over the course of 12 months. So we look forward to sharing those data both from the efficacy's perspective and also then safety and tolerability, which will give you a nice picture of what we believe are low rates of adverse events and really good continuation in the trials. So everything has been done. It's a matter of, as we announced, basically to disclosing the results later this quarter.
spk00: Got it. Thanks so much, guys.
spk02: Thank you, Len.
spk05: Ladies and gentlemen, we have reached the end of the question and answer session. I would like to turn the call back to Sergio Traversa for closing comments.
spk10: Thank you. Thank you, Maurizio. So, in summary, we remain confident that we have an approvable drug. that we have the right plan and team in place to achieve success. So we look forward to reporting on progress with Reliance II and RELI throughout the remainder of the year. In closing, I do remain grateful to the RealMata team for their continued hard work and dedication to executing on our mission. I also would like to extend my sincere thanks to the patients and clinical partners involved in the REL 1017 trials for their participation. in the advancement of this promising investigational medicine through development. Thank you very much to everyone, and I wish everybody a good end of the day.
spk05: Thank you. This concludes today's conference. You may disconnect your lines at this time.
Disclaimer