Relmada Therapeutics, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022; filed March 23, 2023. This is an annual report, not a standalone fourth-quarter report. Relmada is a clinical-stage biotechnology company developing esmethadone (REL-1017), primarily for major depressive disorder (MDD). It had no approved products or commercial revenue.
Financial performance and liquidity
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $113.3 million | $90.6 million |
| General and administrative expense | $47.9 million | $35.1 million |
| Total operating expenses | $161.2 million | $125.7 million |
| Net loss | $157.0 million | $125.8 million |
| Net loss per share, basic and diluted | $5.30 | $7.16 |
| Cash used in operating activities | $103.8 million | $91.9 million |
Operating expenses rose as the company conducted three Phase 3 trials and an open-label extension study; higher R&D and G&A costs were partly offset by lower R&D stock-based compensation and manufacturing costs. The 2022 net loss included a $6.35 million settlement gain, $2.66 million of investment income, and $4.22 million of unrealized losses on short-term investments. Stock-based compensation was $44.2 million. Profit margins are not meaningful because the company had no revenue.
At year-end, cash and cash equivalents were $5.4 million and short-term investments were $142.9 million, for combined cash and investments of approximately $148.3 million. Current liabilities were $12.5 million; the balance sheet reported no debt. Stockholders’ equity was $140.4 million, down from $208.3 million a year earlier, and accumulated deficit was $462.1 million. The company raised $42.7 million net through an at-the-market stock offering in 2022. Management said available funds and budgeted requirements were sufficient for at least 12 months from the filing/financial-statement issuance date; additional trials beyond planned operations may depend on further financing.
Material developments and outlook
- Two pivotal Phase 3 studies missed their primary endpoints: RELIANCE III (monotherapy) in October 2022 and RELIANCE I (adjunctive treatment) in December 2022. RELIANCE III showed a 14.8-point MADRS reduction versus 13.9 for placebo. RELIANCE I showed reductions of 15.1 versus 12.9; the 2.2-point difference did not meet the primary endpoint, although response rates were 39.8% versus 27.2% (nominal p<0.05).
- The company’s earlier, smaller Phase 2 trial had reported statistically significant improvement on depression measures. Later-stage results did not reproduce a successful primary endpoint, increasing development uncertainty.
- The FDA granted REL-1017 Fast Track designation for MDD monotherapy. The company said the FDA did not require a two-year carcinogenicity study or a human Thorough QT cardiac study based on the information then available and the planned Phase 3 program.
- Management anticipated RELIANCE II results in the first half of 2024, initiation of a new Phase 3 adjunctive MDD trial in mid-2023, and open-label study results in mid-2023. These were expectations stated in the filing, not guaranteed outcomes.
- The company expects ongoing losses and no near-term revenue. Its lead candidate is a Schedule II controlled substance, and supply quotas, regulatory requirements, clinical-trial outcomes, third-party manufacturing, competition, and future financing are material risks.
Other notable matters
- The esmethadone license includes royalties and milestone obligations, and a “Key Man” provision tied to the CEO was extended through December 31, 2027.
- The company reported no legal proceeding expected to have a material adverse effect. The independent auditor issued an unqualified opinion on the financial statements and reported no critical audit matters.
- Management concluded disclosure controls and internal control over financial reporting were effective at year-end. The auditor did not attest to internal-control effectiveness because Relmada was a non-accelerated filer.
- Potential dilution is significant: 12.1 million options were outstanding at year-end, and a proposed increase to the equity plan required shareholder approval. The filing also described options subject to that approval.
Key facts for investors to verify
- RELIANCE II and any new Phase 3 trial: endpoints, enrollment, timing, and whether results address the failures of RELIANCE I and III.
- Cash use, investment values, and financing runway—especially the distinction between the stated 12-month runway and funding needed for additional trials.
- Whether additional equity issuance, equity-plan approval, or option exercises materially dilute existing shareholders.
- Clinical, regulatory, supply, and controlled-substance risks, including the terms and continuation of the esmethadone license and its CEO-related provision.
- How much of 2022’s reported loss and cash burn reflects recurring development costs versus noncash compensation, investment valuation changes, and the one-time settlement gain.