Relmada Therapeutics, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed March 19, 2024. This is an annual report, not a standalone fourth-quarter report. Relmada is a clinical-stage biotechnology company with no approved products, commercial sales, or product revenue.
Business context and pipeline
The lead candidate is esmethadone (REL-1017), being developed for major depressive disorder (MDD). The company also plans to develop REL-P11, a modified-release psilocybin formulation for metabolic indications.
- Two Phase 3 MDD trials, RELIANCE I and RELIANCE III, failed to meet their primary endpoints in 2022. RELIANCE II and RELIGHT, both adjunctive-treatment trials, remained ongoing at filing.
- Study 310, a long-term open-label study, completed visits in July 2023. The company reported results for 204 new-to-treatment patients and safety data for 627 participants; the uncontrolled findings do not establish efficacy versus placebo.
- Management anticipated RELIANCE II top-line data in the second half of 2024, completion of RELIGHT enrollment by year-end 2024, and initiation of a REL-P11 Phase 1 trial in obese patients in the first half of 2024.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $54.8 million | $113.3 million |
| General and administrative expense | $48.9 million | $47.9 million |
| Net loss | $98.8 million | $157.0 million |
| Net loss per share, basic and diluted | $3.28 | $5.30 |
| Net cash used in operating activities | $51.7 million | $103.8 million |
- R&D expense fell about 52%, primarily as Phase 3 and Study 310 costs declined. G&A expense increased about 2%.
- Net loss narrowed about 37%. FY2022 included a $6.35 million settlement gain, while FY2023 had no such gain. FY2023 also included $5.15 million of interest and investment income, $4.06 million of realized investment losses, and $3.82 million of unrealized investment gains.
- At year-end, cash and cash equivalents were $4.1 million and short-term investments were $92.2 million, totaling $96.3 million, down from $148.3 million a year earlier. Current liabilities were $12.2 million and total liabilities were $12.2 million; the balance sheet reports no debt.
- Operating cash use declined year over year. Investing activities provided $50.5 million, mainly from net sales of short-term investments; financing activities used $0.1 million. The company raised no equity in 2023.
- Accumulated deficit was $560.9 million. Management said available funds were expected to support operations for at least 12 months from issuance of the financial statements, while later trials or expanded operations could require additional financing.
- No meaningful operating margin is available because the company had no revenue. Stock-based compensation was $43.8 million in 2023.
Outlook, risks, and unusual items
- Clinical execution and regulatory approval remain central uncertainties, particularly after two pivotal REL-1017 trials missed their primary endpoints. The filing cautions that open-label and preliminary results may not predict controlled-trial outcomes.
- REL-1017 is currently classified as a Schedule II controlled substance; psilocybin is Schedule I. DEA quotas, handling rules, and potential rescheduling create supply, trial, timing, and commercialization risks.
- The company relies on third parties for clinical trials and manufacturing and has no manufacturing capabilities. It also reports that it does not carry product-liability insurance.
- Relmada pays the esmethadone licensors $45,000 quarterly and owes potential royalties and milestone payments. The license’s “key man” provisions, extended through December 31, 2027, may restrict changes involving the CEO and could affect the license rights.
- Options for 4,363,250 shares issued in December 2023 are subject to shareholder approval of a proposed equity-plan amendment; if not approved, those options will be void. The amendment would add 4.5 million shares to the plan.
- The independent auditor gave 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; the auditor did not attest to internal-control effectiveness.
Important facts for investors to verify
- Current cash, investment balances, actual cash burn, and whether management’s stated runway remains adequate as trial spending changes.
- Enrollment progress, primary-endpoint results, and timing for RELIANCE II and RELIGHT, as well as any FDA feedback on the overall evidence needed after the earlier Phase 3 failures.
- Whether REL-P11’s planned human trial began, and what clinical evidence supports its proposed metabolic use.
- Shareholder approval and final terms of the equity-plan amendment, including the potential dilution from outstanding and proposed awards.
- Any changes to esmethadone licensing terms, key-man provisions, controlled-substance supply arrangements, or financing plans.