Relmada Therapeutics, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023; unaudited. Relmada is a clinical-stage biotechnology company developing esmethadone (REL-1017), with no approved products and no revenue.
Financial results and position
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | None reported | None anticipated in the foreseeable future |
| Research and development | $15.9 million | $25.0 million; down $9.2 million |
| General and administrative | $12.3 million | $13.3 million; down $1.0 million |
| Total operating expenses | $28.2 million | $38.3 million; down $10.1 million |
| Net loss | $26.3 million | $39.7 million |
| Basic and diluted loss per share | $0.87 | $1.40 |
| Operating cash flow | $(16.5) million | $(19.4) million |
As of March 31, cash and cash equivalents were $28.9 million and short-term investments were $103.5 million, totaling $132.4 million in these liquid assets. Current liabilities were $10.1 million; the filing reports no debt. Accumulated deficit was $488.4 million. No operating margin is meaningful because the company reported no revenue.
Management said available cash and investments were expected to fund operating expenses and capital requirements for at least 12 months from issuance of the financial statements. Q1 investing cash inflow of $40.0 million primarily reflected net sales of short-term investments; there was no financing cash flow. Cash rose by $23.5 million during the quarter.
Material changes and operating developments
- R&D expense fell mainly because study and other costs declined following completion of RELIANCE I and RELIANCE III in late 2022. Lower manufacturing and drug-storage costs also contributed. Higher compensation and R&D stock-based compensation partly offset the decrease.
- Net loss narrowed year over year, aided by lower operating expenses and improved investment income and unrealized investment results. Interest and investment income was $1.2 million versus $0.3 million; short-term investments recorded a $0.7 million realized loss and a $1.3 million unrealized gain, compared with a $1.8 million unrealized loss in Q1 2022.
- RELIANCE III, a monotherapy Phase 3 trial, did not meet its primary endpoint. RELIANCE I, an adjunctive Phase 3 trial, also missed its primary endpoint, although the filing reports a 2.2-point MADRS difference and a nominally significant response-rate difference versus placebo. These results are important setbacks for development.
- The company continued the second adjunctive Phase 3 trial, RELIANCE II. Management anticipated results in the first half of 2024, initiation of a new Phase 3 adjunctive trial in mid-2023, with completion expected in the second half of 2024, and RELIANCE open-label study results in mid-2023.
Outlook, risks, and other items
Management’s liquidity outlook depends on existing cash and investments; beyond the stated 12-month period, additional financing could be needed, potentially through equity or debt offerings, loans, collaborations, or licensing. The company cautions that clinical development, regulatory approval, financing, competition, and other biotechnology-sector risks could materially affect results. The filing says there were no material changes to previously disclosed risk factors and no known legal proceedings likely to have a material adverse effect.
Potential commitments include up to approximately $160 million in development and commercialization milestones under the Arbormentis license, plus royalties if products are commercialized. The company also continues quarterly $45,000 payments under the Inturrisi/Manfredi license. These are contingent or ongoing contractual obligations, not reported debt. Cash deposits exceeded federally insured limits. Stock-based compensation was $11.4 million in the quarter; approximately $84.5 million of option compensation and $5.5 million related to warrants remained unrecognized. Options for 1,934,975 shares were subject to shareholder approval of an incentive-plan amendment and would be forfeited if it were not approved.
Important facts for investors to verify
- Updated clinical results, timelines, and regulatory implications for RELIANCE II, the planned new adjunctive Phase 3 trial, and the open-label study—especially in light of the two prior Phase 3 primary-endpoint misses.
- Cash burn and the company’s liquidity runway, including whether future trials or operations require additional financing and the potential dilution or obligations from that financing.
- The filing’s MD&A states net loss was approximately $26.352 million, while the financial statements report $26.322 million. Confirm the correct figure; this summary uses the statement amount.
- Shareholder approval status for the equity-plan amendment and the related options subject to that approval; also monitor potential milestone and royalty obligations under license agreements.