Relmada Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; filed May 8, 2024. Financial statements are unaudited. Relmada is a clinical-stage biotechnology company developing esmethadone (REL-1017) and modified-release psilocybin (REL-P11). It has no approved products, commercial sales, or revenue.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $13.31 million | $15.86 million |
| General and administrative expense | $9.68 million | $12.29 million |
| Total operating expenses / operating loss | $22.99 million | $28.15 million |
| Net loss | $21.83 million | $26.32 million |
| Basic and diluted loss per share | $0.72 | $0.87 |
| Net cash used in operating activities | $13.04 million | $16.51 million |
Operating and net losses narrowed year over year, primarily alongside lower study costs and stock-based compensation. Other income was $1.16 million, versus $1.83 million, including investment income and realized and unrealized investment gains. Gross margin and operating margin are not meaningful for this pre-commercial company.
At March 31, 2024, cash and cash equivalents were $1.34 million and short-term investments were $82.28 million, totaling $83.61 million; total current liabilities were $12.36 million and total assets were $84.41 million. The filing reports no debt. Management believes available cash and investments will fund operating expenses and capital requirements for at least 12 months from issuance of the statements. Accumulated deficit was $582.73 million. Cash and cash equivalents declined $2.76 million during the quarter; investment sales exceeded purchases, providing $10.06 million of investing cash flow.
Material changes and business developments
- R&D expense fell $2.56 million year over year. Lower study costs after completion of Study 310 and RELIANCE I and III were partly offset by increased costs associated primarily with ramp-up of studies 302 and 304.
- G&A expense fell $2.61 million, primarily due to lower stock-based compensation.
- RELIANCE I and RELIANCE III, Phase 3 trials of REL-1017, did not meet their primary endpoints. RELIANCE II and RELIGHT, both adjunctive Phase 3 trials, remained ongoing.
- Management expected to complete RELIANCE II enrollment, targeting approximately 300 patients, and report topline results in the second half of 2024. It also planned to initiate a Phase 1 study of REL-P11 in obese patients in the first half of 2024.
Outlook, risks and contingencies
Management expects to fund operations for at least 12 months from the financial statement issuance date; further financing may be needed thereafter depending on the scope and timing of operations and clinical trials. The company’s principal risks include clinical-development and regulatory uncertainty, the need for future financing, and its lack of revenue. The filing states there were no material changes to previously disclosed risk factors and no known legal proceedings likely to have a material adverse effect.
Potential obligations include up to approximately $160 million in development and commercialization milestones under the Arbormentis license, plus royalties; these are contingent on specified events. Relmada also continues quarterly payments of $45,000 under its esmethadone license and may owe future royalties and milestone payments. A proposed 4.5 million-share increase to the 2021 equity plan required shareholder approval; 3,960,193 options issued subject to that approval would be forfeited if it is not approved. The filing reports no subsequent events.
Other items to note: stock-based compensation was $8.30 million in Q1, and approximately $54.0 million of unrecognized option compensation remained. Cash deposits exceeded federally insured limits. The filing states disclosure controls were effective as of March 31, 2024.
Key facts for investors to verify
- Progress, enrollment, timing and results for RELIANCE II and RELIGHT, particularly given the prior Phase 3 endpoint failures.
- Whether the REL-P11 Phase 1 trial began as planned and what its safety, tolerability and pharmacokinetic results show.
- Cash burn, investment balances and runway as clinical spending changes; management’s runway estimate is not a guarantee of funding beyond 12 months.
- Shareholder approval and potential dilution related to the proposed equity-plan increase and options issued subject to approval.
- The MD&A states Q1 2023 net loss as $26.35 million in one passage, while the financial statements report $26.32 million; confirm the comparative figure against the filed statements.