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Relmada Therapeutics (NASDAQ:RLMD) is a nanocap company developing therapies for CNS diseases. Lead asset is Esmethadone or REL-1017, which functions as a blocker for N-methyl-D-aspartate (NMDA) receptor channels, specifically targeting hyperactive GluN2D channels. NMDA receptors play a crucial role in physiological neural plasticity, and causing various central nervous system (CNS’) disorders, such as Major Depressive Disorder (MDD’) when they are dysfunctional. The primary contributor to MDD appears to be the heightened activity of a specific subtype of NMDA receptors, namely the GluN1-GluN2D subtype. REL-1017 has the potential to modulate the activity of these receptors without disrupting the normal functioning of other NMDA receptors, offering a targeted approach to address excessive NMDA receptor activity associated with MDD.[paraphrased from company material].
The company has conducted a phase 1 and a phase 2 trial. The phase 1 trial showed a favorable tolerability, safety and pharmacokinetic profile, while the phase 2 trial produced “rapid, robust and sustained” antidepressant effect in patients who did not previously respond adequately to standard antidepressants. A pivotal and registrational phase 3 trial is ongoing.
Data from the phase 2a trial has been published a few years ago. I have note of multiple publications, the latest of which is this one here; interestingly, “topline” data from apparently the same trial seems to have been published as early as 2019.
Data from the 62 patient study, where patients are randomized 1:1:1 to placebo (N=22), REL-1017 25 mg/day (N=19), or REL-1017 50 mg/day (N=21), with primary efficacy endpoint being the Montgomery-Asberg Depression Scale (MADRS) score, shows the following:
Subject characteristics: Subjects were adults with major depressive disorder (MDD’) who did not respond to one to three courses of antidepressant treatment in their current episode. 62 subjects, average age 49.2 years, with an average Hamilton Depression Rating Scale score of 25.3 and an average Montgomery-Asberg Depression Rating Scale (MADRS) score of 34.0 (severe depression), were randomized. Other demographic characteristics were balanced across all arms.
Key findings: Subjects in both the REL-1017 25 mg and 50 mg treatment groups experienced statistically significant improvement of their depression compared to subjects in the placebo group on all efficacy measures, including: the Montgomery-Asberg Depression Rating Scale (MADRS); the Clinical Global Impression – Severity (CGI-S) scale; the Clinical Global Impression – Improvement (CGI-I) scale; and the Symptoms of Depression Questionnaire (SDQ).
The improvement on the MADRS appeared on Day 4 in both REL-1017 dose groups and continued through Day 7 and Day 14, seven days after treatment discontinuation, with P values < 0.03 and large effect sizes (a measure of quantifying the difference between two groups), ranging from 0.7 to 1.0. Similar findings emerged from the CGI-S and CGI-I scales.
Treatment administered was oral. Patients were refractory to up to three lines of treatment, and were diagnosed with severe depression. They were scored by trained researchers using two of the most widely used depression rating scales – MADRS and HDRS. Treatment effect happened quickly within four days and was sustained through day 7 to 14, that is, 7 days after treatment discontinuation. These are very competitive scores. The effect onset at day 4 is important because similar trials in, say, psilocybin measured treatment effects over much longer periods, with onset happening at week 3. Here’s a comparative data:
The incidence of response at week 3 was 37% in the 25-mg group, 19% in the 10-mg group, and 18% in the 1-mg group (odds ratio in the 25-mg group vs. the 1-mg group, 2.9 [95% CI, 1.2 to 6.6]; odds ratio in the 10-mg group vs. the 1-mg group, 1.2 [95% CI, 0.5 to 3.0]) (Table 2). The incidence of remission at week 3 was 29% in the 25-mg group, 9% in the 10-mg group, and 8% in the 1-mg group (odds ratio in the 25-mg group vs. the 1-mg group, 4.8 [95% CI, 1.8 to 12.8]; odds ratio in the 10-mg group vs. the 1-mg group, 1.2 [95% CI, 0.4 to 3.9]). The incidence of sustained response at week 12 was 20% in the 25-mg group, 5% in the 10-mg group, and 10% in the 1-mg group (odds ratio in the 25-mg group vs. the 1-mg group, 2.2 [95% CI, 0.9 to 5.4]; odds ratio in the 10-mg group vs. the 1-mg group, 0.7 [95% CI, 0.2 to 2.0]).
Clearly, there’s a need for more rapid onset of treatment effect, where REL 1017 has a competitive space. Another recently approved, well-known antidepressant treatment, AXS-05 or auvelity from Axsome, tested treatment onset at week 6. There, the primary endpoint was the change from baseline to week 6 in the Montgomery-Asberg Depression Rating Scale (MADRS) total score. While the treatment effect was of a much higher order at week 6 for both the drug trials cited, rapid onset of treatment effect, like the company noted, is the target of REL 1017. Importantly, there were no typical opioid or psychotomimetic symptoms and no withdrawal effects on abrupt discontinuation in the selected doses.
Another key competitive difference suggested by the study is the lack of dissociative effects of REL 1017 compared to ketamines. As the authors note:
The results of this trial suggest that dissociative effects may not be necessary for the antidepressant effects of NMDAR channel blockers. The lack of dissociative side effects in patients treated with REL-1017 suggests potential sparing of physiologically operating NMDARs. In contrast, higher-potency NMDAR channel blockers, such as ketamine and esketamine, cause temporary dissociative symptoms in the majority of patients at doses effective for major depressive disorder, indicating that the NMDAR block exerted by these drugs may extend, at least temporarily, to physiologically operating NMDARs.
Unfortunately, these promising results were not reflected in the first of the two phase 3 studies, the Reliance I (study 301) study. This study missed its primary endpoint of a statistically significant improvement in depression symptoms compared to placebo as measured by the MADRS scale on Day 28. The company attributed this to “the same factors that negatively affected the previously announced results from the RELIANCE III study, a limited number of high enrolling sites with unplausible placebo response, also affected RELIANCE I.”
As the company noted:
As was observed in the monotherapy study RELIANCE III (Study 303), implausible results were again observed in two of the same high enrolling RELIANCE I (Study 301) study centers, where placebo dramatically outperformed REL-1017. While the patient population in RELIANCE I was different than RELIANCE III in that subjects enrolled should already have been diagnosed with depression and did not respond adequately to at least one, and up to three courses of antidepressant therapy, a limited number of the same high enrolling centers had implausible rapid and sustained placebo response rates that outperformed REL1017.
In a post-hoc analysis of RELIANCE 1 (301 Study) that excluded the same two high enrolling centers that showed implausible placebo response in both REL-1017 studies, the REL-1017 treatment arm (n=97) showed a MADRS reduction of 16.7 points at Day 28 versus 12.6 points for the placebo arm (n=88), a 4.1 point difference, with a p<0.02.
A second post-hoc confirmatory analysis, using the well-established band-pass method (Merlo-Pich et al, 2010¹), that excludes patients from those centers with implausible responses in the placebo arm (centers with a placebo response less than 3% from baseline and more than 33% from baseline) showed a robust difference between REL-1017 and placebo.
Thus, there was a very high placebo effect at two high enrolling clinical sites, and removing these from the picture resulted in a much more robust effect size in post hoc analysis. The company is continuing studies on the basis of this post hoc analysis, however the poor show reflects on the market cap and share price of the company.
In September, a long term phase 3 study (Study 310) showed that “REL-1017 led to fast, clinically meaningful, and lasting improvements in depressive symptoms” with mean improvement in MADRS total scores of 22.5 points at Month 12 from a baseline score of 33.8.
As for data catalysts, here’s what management said:
Enrollment in the ongoing Reliance II (study 302) is progressing as planned and it remains on track to be completed in the in the first half of 2024. The initial patients have been enrolled into Relight, the new Phase 3 study (study 304), and we continue to anticipate the completion of this trial in the second half of next year.
Financials
RLMD has a market cap of $101mn and a cash balance of $106mn. Research and development expense for the three months ended September 30, 2023, totaled $10.5 million, while general and administrative expense for the three months ended September 30, 2023, totaled $12.2 million. At that rate, the company has a cash runway of 4-5 quarters. However, for a 14-employee company (according to Seeking Alpha data), the G&A expense is very, very high. The company attributes it to stock-based compensation.
Risks
Relmada has been doing a dizzying variety of trials because its normal proceedings seem to have been halted by the spectacular failure – for whatever reasons – in that first phase 3 trial. This is a risk because it compounds the confusion.
The expense score is very high, and the company needs to rapidly shore up efforts to save its dwindling cash balance.
Trading volume is also very low. As always, I do not invest in such nanocap companies.
Bottomline
I got interested in the company because of the rapid onset program, which is difficult to achieve in treatment resistant MDD. However, the trial failure has had a telling effect on the investment thesis. I will stay on the sidelines and watch for more convincing phase 3 data.
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