Relmada Therapeutics, Inc. — Q1 2022 Form 10-Q
Business context and reporting period. This unaudited quarterly filing covers the three months ended March 31, 2022. Relmada is a clinical-stage biotechnology company developing esmethadone (REL-1017), primarily for major depressive disorder (MDD). It had no approved products, commercial revenue, or sales infrastructure.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | None reported; the company says it has not generated revenue. | None reported |
| Research and development expense | $25.0 million | $14.0 million; up $11.0 million, or approximately 78% |
| General and administrative expense | $13.3 million | $8.4 million; up $4.9 million, or approximately 58% |
| Total operating expenses | $38.3 million | $22.4 million; up $15.9 million, or approximately 71% |
| Net loss / loss per share | $39.7 million / $1.40 | $22.2 million / $1.34 |
| Operating cash flow | $(19.4) million | $(16.1) million |
| Cash and cash equivalents | $44.9 million at March 31, 2022 | $44.4 million at December 31, 2021 |
| Short-term investments | $175.7 million at March 31, 2022 | $167.5 million at December 31, 2021 |
| Current liabilities | $15.4 million | $15.1 million at December 31, 2021 |
There is no revenue or gross margin to assess. The balance sheet reports no debt; total liabilities consist of current liabilities. Cash plus short-term investments totaled approximately $220.6 million at quarter-end. Management stated that existing cash and cash equivalents were expected to fund operations and capital requirements for at least 12 months from issuance of the statements. The company had an accumulated deficit of $344.8 million.
Material changes and notable items
- Higher R&D expense primarily reflected increased costs for four Phase 3 trials (approximately $7.8 million) and other research expenses, including consultants (approximately $3.6 million). R&D stock-based compensation also increased.
- Higher G&A expense was primarily driven by a $5.4 million increase in stock-based compensation, partly offset by lower other G&A costs.
- Net loss included $1.8 million of unrealized losses on short-term investments, compared with $0.2 million in Q1 2021. Stock-based compensation was $11.9 million, versus $5.9 million.
- The company raised $29.6 million net through its existing at-the-market (ATM) offering during the quarter. Financing cash flows were $29.9 million; the increase was partly offset by $10.0 million of net cash used in investing activities.
- Common shares outstanding were 29.4 million at March 31, 2022, compared with 27.7 million at year-end 2021. The share count increased primarily through ATM sales and option and warrant exercises.
Outlook, development program, and risks
- At the filing date, management anticipated results from the RELIANCE III monotherapy MDD trial in mid-2022 and results from the RELIANCE I and II adjunctive MDD trials and the long-term open-label study in the second half of 2022. These are forward-looking expectations, not reported outcomes.
- In April 2022, the company entered into a new ATM agreement permitting up to $100 million of share sales. It reported $13.3 million of net proceeds from shares sold on April 8, 2022. This provides financing capacity but may dilute shareholders.
- Relmada cited clinical and regulatory execution, the need for future financing for later trials, competition, and dependence on product approval and commercial viability among its business risks. The filing says the company did not expect COVID-19 to materially affect its long-term development timeline or liquidity but continued monitoring potential effects.
- The company reported no legal proceedings or potential claims expected to have a material adverse effect. It disclosed potential development and commercialization milestone payments of up to approximately $160 million under its Arbormentis license, plus royalties; these are contingent obligations.
- Options for 3.6 million shares had been issued subject to shareholder approval of an increase to the 2021 equity plan; the filing says they would be forfeited if the amendment were not approved. Unrecognized stock compensation related to unvested options was approximately $129.7 million.
Important facts for investors to verify
- Subsequent results, enrollment, timing, and safety findings for the three Phase 3 REL-1017 trials against the filing’s expected milestones.
- Actual cash burn and runway, including how management’s runway estimate accounts for short-term investments and trial spending.
- ATM share sales, remaining capacity, and resulting dilution, including the April 2022 issuance.
- Shareholder approval status and treatment of the options contingent on the equity-plan amendment.
- Potential license milestone and royalty obligations, and any material changes to clinical, regulatory, or financing risks.