Relmada Therapeutics, Inc. (RLMD) is a late-stage biotechnology company focused on developing novel therapies for the treatment of central nervous system (CNS) disorders. With a promising pipeline and a steadfast commitment to addressing unmet medical needs, Relmada has positioned itself as a key player in the rapidly evolving CNS pharmaceutical landscape.
Business Overview and History
Relmada Therapeutics was founded in Nevada with the mission of leveraging its expertise in CNS drug development to bring innovative treatments to patients suffering from a range of debilitating conditions. The company's primary focus has been on the development of esmethadone (d-methadone, dextromethadone, REL-1017), a new chemical entity targeting areas of high unmet medical need in CNS diseases and other disorders.
In 2014, Relmada took a significant step in its corporate development by adopting the 2014 Stock Option and Equity Incentive Plan, which was approved by shareholders and allowed for the granting of stock options and other stock awards. This was followed by the adoption and shareholder approval of the 2021 Equity Incentive Plan, further expanding the shares available for issuance and demonstrating the company's commitment to attracting and retaining top talent.
The company has faced several challenges in its journey, particularly with its lead product candidate, esmethadone. In late 2022, Relmada announced that its RELIANCE I and RELIANCE III Phase 3 trials for esmethadone did not achieve their primary endpoints, representing a significant setback. However, the company has shown resilience by continuing to advance its clinical development programs, including the completion of a long-term open-label study of esmethadone in 2023.
In a strategic move to diversify its pipeline, Relmada acquired the rights to a novel psilocybin program, REL-P11, in 2021. This acquisition has allowed the company to expand its focus beyond esmethadone and explore new potential therapeutic avenues in the CNS space.
Financial Situation
As of September 30, 2024, Relmada reported cash, cash equivalents, and short-term investments of $54.1 million, compared to $96.3 million as of December 31, 2023. The company's cash used in operations for the third quarter of 2024 was $16.7 million, compared to $11.6 million for the same period in 2023.
Relmada's research and development (R&D) expenses for the third quarter of 2024 were approximately $11.1 million, up from $10.5 million in the same period of 2023. This increase was primarily associated with the ramp-up of expenses related to the company's ongoing clinical trials. General and administrative (G&A) expenses for the third quarter of 2024 were $11.9 million, down from $12.2 million in the same period of 2023, driven by a decrease in stock-based compensation expense.
The net loss for the third quarter of 2024 was $21.7 million, or $0.72 per basic and diluted share, compared to a net loss of $22 million, or $0.73 per basic and diluted share, in the same period of 2023. This represents a slight improvement in net loss compared to the previous year.
For the fiscal year 2023, Relmada reported no revenue, an annual net loss of $98.8 million, and annual operating and free cash flows of -$51.7 million. The company does not break out performance by geographic markets, as it is likely a small cap company that only sells in the US.
Liquidity
Relmada's current cash position is expected to support operations through key near-term milestones into 2025, providing the company with the necessary resources to navigate the challenges and capitalize on potential opportunities. As of September 30, 2024, the company had $1.5 million in cash and cash equivalents and $52.6 million in short-term investments, for a total of $54.1 million in cash, cash equivalents and short-term investments.
The company does not have any debt, resulting in a debt/equity ratio of 0. The current ratio and quick ratio are both 6.89, indicating strong liquidity.
REL-1017 (esmethadone) Clinical Development
The primary focus of Relmada's clinical development efforts has been on the advancement of REL-1017 as an adjunctive treatment for MDD. The company's Phase 3 program, comprising the RELIANCE II and RELIGHT studies, is designed to evaluate the efficacy and safety of REL-1017 in patients with MDD.
In December 2024, Relmada announced that the pre-planned interim analysis of the RELIANCE II study, conducted by an Independent Data Monitoring Committee (DMC), indicated that the study is futile and unlikely to meet the primary efficacy endpoint with statistical significance. While this was a disappointing outcome, the company has stated that it will evaluate the full dataset to determine the next steps for the REL-1017 program.
Despite this setback, Relmada remains committed to exploring the potential of REL-1017 in the treatment of MDD and other CNS disorders. The company plans to continue the ongoing RELIGHT study and is evaluating potential strategic alternatives to maximize shareholder value.
In a completed Phase 2 clinical trial, subjects in both the 25mg and 50mg REL-1017 treatment groups experienced statistically significant improvement on all efficacy measures compared to the placebo group, including the Montgomery-Asberg Depression Rating Scale (MADRS), the Clinical Global Impression Severity (CGI-S) scale, and the Symptoms of Depression Questionnaire (SDQ). The improvements in the MADRS endpoint appeared as early as Day 4 in both REL-1017 dose groups and continued through Day 14, one week after treatment discontinuation. The study also confirmed the tolerability profile of REL-1017, with subjects experiencing only mild and moderate adverse events.
While the RELIANCE I adjunctive study did not meet its primary endpoint, it did show a clinically meaningful difference in the REL-1017 treatment arm compared to placebo, as well as a nominally statistically significant difference in response rate. The company recently reported positive results from the long-term, open-label Study 310, which showed that patients treated daily with REL-1017 for up to one year experienced rapid, clinically meaningful, and sustained improvements in depressive symptoms and associated functional impairment. REL-1017 was also well-tolerated with long-term dosing.
REL-P11 for Metabolic Indications
In addition to its work on REL-1017, Relmada has also been developing a novel, modified-release formulation of psilocybin, known as REL-P11, for the treatment of metabolic indications. In 2024, the company announced the initiation of a Phase 1 single-ascending dose (SAD) study of REL-P11 in obese subjects, with the goal of defining the pharmacokinetic, safety, and tolerability profile of this investigational agent.
Pending positive results from the Phase 1 study, Relmada plans to advance REL-P11 into a Phase 2a proof-of-concept study in 2025, further diversifying its pipeline and exploring the potential of psilocybin-based therapies in the treatment of metabolic disorders.
The original focus of the REL-P11 program was on neurodegenerative diseases, as psilocybin has been shown to have neuroplastogen effects that could potentially ameliorate the consequences of multiple neurodegenerative conditions. However, during preclinical studies in a rodent model of metabolic dysfunction-associated steatotic liver disease (MASLD), the company also observed beneficial effects of psilocybin on multiple metabolic parameters, including reduced hepatic steatosis, reduced body weight gain, and fasting blood glucose levels.
Risks and Challenges
Relmada Therapeutics faces several key risks and challenges as it navigates the complex and competitive CNS pharmaceutical landscape. The failure of the RELIANCE I and RELIANCE III studies for REL-1017 has highlighted the inherent uncertainties and challenges associated with drug development, particularly in the highly competitive MDD treatment market.
Furthermore, the company's dependence on the successful development and commercialization of its lead product candidate, REL-1017, exposes it to significant regulatory and commercial risks. Any further setbacks or delays in the REL-1017 program could have a material adverse impact on Relmada's financial position and long-term prospects.
The company's limited financial resources and the need to secure additional funding to support its ongoing operations and clinical development efforts also present a significant challenge. Relmada's ability to raise capital and execute its strategic plan will be crucial in determining its future success.
Outlook and Conclusion
Despite the recent challenges faced by Relmada Therapeutics, the company remains committed to advancing its pipeline of novel CNS therapies and exploring strategic alternatives to maximize shareholder value. The upcoming interim analysis of the RELIANCE II study, expected by the end of 2024, could represent an important de-risking event for the REL-1017 program and the company as a whole.
The interim analysis will have three potential outcomes: 1) The study can continue with the pre-planned number of patients, which is their preferred outcome; 2) The study may need to enroll additional patients, which would indicate a promising efficacy signal from the interim data; or 3) The study may be deemed futile, which means a clinically meaningful result is highly unlikely. The futility threshold is set at a drug-placebo delta of approximately 2.2 points.
Moreover, Relmada's diversification into the psilocybin-based REL-P11 program for metabolic indications provides a promising avenue for growth and diversification, potentially reducing the company's dependence on the success of its MDD treatment efforts.
As Relmada Therapeutics navigates the challenges and uncertainties of the CNS pharmaceutical industry, its ability to execute its strategic plan, secure necessary funding, and deliver on the promise of its pipeline will be crucial in determining its long-term trajectory. Investors and stakeholders will closely monitor the company's progress as it continues to chart a path forward in its quest to develop innovative therapies for CNS disorders and metabolic indications.