Relmada Therapeutics, Inc. — Form 10-Q Summary
Reporting period: Three and nine months ended September 30, 2021; filed November 12, 2021. Relmada is a clinical-stage biotechnology company developing esmethadone (REL-1017), principally for major depressive disorder (MDD). It had no commercial products and reported no revenue.
Financial performance and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Research and development expense | $33.99 million | $11.24 million | $65.35 million | $21.07 million |
| General and administrative expense | $8.66 million | $5.95 million | $26.17 million | $18.85 million |
| Total operating expenses | $42.65 million | $17.18 million | $91.52 million | $39.92 million |
| Net loss | $42.61 million | $16.90 million | $91.37 million | $38.69 million |
| Loss per share, basic and diluted | $2.44 | $1.05 | $5.36 | $2.52 |
At September 30, 2021, cash and cash equivalents were $11.45 million and short-term investments were $76.64 million, or $88.09 million combined. Current assets were $90.89 million and current liabilities were $18.25 million, yielding working capital of approximately $72.64 million. The balance sheet shows no debt; current liabilities consisted of accounts payable and accrued expenses.
For the first nine months, operating cash use was $54.21 million, investing activities provided $37.06 million net, and financing activities provided $26.10 million. Cash increased by $8.95 million to $11.45 million. Financing included $23.42 million net from the ATM stock offering, $2.12 million from warrant exercises, and $0.57 million from option exercises. Management said available cash and cash equivalents were expected to fund operations for at least 12 months from issuance of the statements.
Changes versus comparable periods
- Nine-month operating expenses more than doubled from 2020, primarily reflecting $26.45 million of higher clinical study costs as the company advanced Phase 3 trials, and a $12.74 million Arbormentis license payment.
- Nine-month net loss increased to $91.37 million from $38.69 million. Operating cash use also increased, from $20.88 million to $54.21 million.
- Cash and short-term investments combined declined from $117.09 million at December 31, 2020 to $88.09 million at September 30, 2021. Common shares outstanding increased from 16.33 million to 17.50 million over that period.
- Stock-based compensation was $32.38 million for the first nine months of 2021, versus $17.59 million in 2020. The filing also reports $67.6 million of unrecognized option compensation and approximately $12.5 million of unrecognized warrant compensation.
Business, outlook, and notable items
- The lead candidate REL-1017 was in Phase 3 development for MDD. The company reported that the RELIANCE I and II adjunctive trials and RELIANCE III monotherapy trial were underway. Management anticipated RELIANCE III results in Q2 2022 and RELIANCE I and II results in the second half of 2022; these were forward-looking expectations, not reported outcomes.
- In July 2021, Relmada licensed worldwide ex-Asia rights to Arbormentis’s psilocybin program. The stated upfront consideration was $12.7 million, including cash and warrants; potential development and commercialization milestones could total approximately $160 million, plus low-single-digit royalties.
- The company reported top-line human abuse-potential study results for REL-1017: tested doses had significantly lower drug-liking scores than oxycodone 40 mg. It also cited positive Phase 2 results for REL-1017, but these were company-reported clinical findings and do not establish regulatory approval or commercial success.
- Management said COVID-19 was not then expected to materially affect the long-term development timeline or liquidity, while noting continued monitoring. The filing identifies clinical, regulatory, financing, intellectual-property, and biotechnology-development risks; future trial scale and financing needs may affect funding requirements beyond the stated runway.
- The company reported no material legal proceedings likely to adversely affect it. A former-employee employment lawsuit was settled in April 2021 for an amount described as immaterial. Disclosure controls were reported effective, with no material quarterly change in internal control over financial reporting.
Important facts for investors to verify
- Whether the anticipated Phase 3 trial timelines and results were achieved, and what full efficacy and safety data show.
- Cash burn, investment balances, and financing needs relative to the stated minimum 12-month runway; the filing’s cash-and-investments total is not all cash on hand.
- Potential dilution from the ATM program, outstanding options and warrants, and the Arbormentis warrant consideration.
- The scope and timing of potential Arbormentis milestone and royalty obligations, and the clinical and commercial prospects of the licensed program.
- That reported clinical findings and management expectations are not assurances of FDA approval, product launch, or future revenue.