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What changed in RELMADA THERAPEUTICS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of RELMADA THERAPEUTICS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+253 added−229 removedSource: 10-K (2024-03-19) vs 10-K (2023-03-23)

Top changes in RELMADA THERAPEUTICS, INC.'s 2023 10-K

253 paragraphs added · 229 removed · 179 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

63 edited+30 added−13 removed154 unchanged
Biggest changeImprovements on the MADRS endpoint 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 MADRS: Analysis of Change from Baseline to Day 7 and to Day 14 ITT Population Day 2 Day 4 Day 7 Day 14 LS Means Difference P-value d LS Means Difference P-value d LS Means Difference P-value D LS Means Difference P-value d REL-1017 25mg vs Placebo -1.9 0.4340 0.3 -7.9 0.0087 0.9 -8.7 0.0122 0.8 -9.4 0.0103 0.9 REL-1017 50mg vs Placebo -0.3 0.9092 0.0 -7.6 0.0096 0.8 -7.2 0.0308 0.7 -10.4 0.0039 1.0 LS = Least Squares; d = Cohen’s effect size The study also confirmed the tolerability profile of REL-1017, which was observed in the Phase 1 studies.
Biggest changeImprovements on the MADRS endpoint 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 The study also confirmed the tolerability profile of REL-1017, which was observed in the Phase 1 studies.
Phase 2 Clinical Trial In the REL-1017-202 study, 62 subjects, with an 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.
Phase 2 Clinical Trial In the REL-1017-202 study, 62 subjects, with an average age of 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.
The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA Orphan Drug Designation is entitled to a seven-year exclusive marketing period in the U.S. for that product, for that indication.
The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA Orphan Drug Designation is entitled to a seven-year exclusive marketing period in the U.S. for the active ingredient in that product, for that indication.
In addition, FDA will not approve the non-racemic drug for any condition of use in the therapeutic category in which the racemic drug has been approved for a period of 10 years after approval of the non-racemic drug, and the labeling of the non-racemic drug will include a statement in the indication that the non-racemic drug is not approved, and has not been shown to be safe and effective, for any condition of use of the racemic drug.
In addition, FDA will not approve the non-racemic drug for any condition of use in the therapeutic category in which the racemic drug has been approved for a period of 10 years after approval of the racemic drug, and the labeling of the non-racemic drug will include a statement in the indication that the non-racemic drug is not approved, and has not been shown to be safe and effective, for any condition of use of the racemic drug.
Additionally, all REL-1017 doses including 150 mg (6 times the therapeutic dose and MTD) were statistically equivalent to placebo (p 2 Top-line Results - Ketamine: On February 23, 2022, Relmada announced top-line results that showed that all three doses of REL-1017 (25 mg, 75 mg, and 150 mg, the therapeutic, supratherapeutic and MTD, respectively) tested in recreational drug users, demonstrated a substantial (30+ points) and statistically significant difference vs. the active control drug, intravenous ketamine 0.5 mg/kg over 40 minutes, and, importantly, were statistically equivalent to placebo.
Additionally, all REL-1017 doses including 150 mg (6 times the therapeutic dose and MTD) were statistically equivalent to placebo (p Top-line Results - Ketamine: On February 23, 2022, Relmada announced top-line results that showed that all three doses of REL-1017 (25 mg, 75 mg, and 150 mg, the therapeutic, supratherapeutic and MTD, respectively) tested in recreational drug users, demonstrated a substantial (30+ points) and statistically significant difference vs. the active control drug, intravenous ketamine 0.5 mg/kg over 40 minutes, and, importantly, were statistically equivalent to placebo.
Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease. 6 Preclinical tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product.
Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease. Preclinical tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product.
The aggregate quota for each controlled substance is allocated among the various individual bulk manufacturers through an application process. Manufacturers of dosage forms are also subject to procurement quotas to obtain the bulk active pharmaceutical ingredients to make finished drugs. Manufacturers may not exceed the manufacturing or procurement quota granted in a given year.
The aggregate quota for each controlled substance is allocated among the various individual bulk manufacturers through an application process. Manufacturers of dosage forms are also subject to procurement quotas to obtain the bulk active pharmaceutical ingredients to make finished drugs. Manufacturers may not exceed the manufacturing or procurement quota granted in a given quarter or year.
Interim patent extensions are not available for a drug for which an NDA has not been submitted. 9 Controlled Substances The active ingredients in esmethadone are regulated as controlled substances pursuant to the Comprehensive Drug Abuse Prevention and Control Act of 1970 (CSA) and regulations promulgated by the United States Drug Enforcement Administration (DEA).
Interim patent extensions are not available for a drug for which an NDA has not been submitted. Controlled Substances The active ingredients in esmethadone are regulated as controlled substances pursuant to the Comprehensive Drug Abuse Prevention and Control Act of 1970 (CSA) and regulations promulgated by the United States Drug Enforcement Administration (DEA).
In the European Union, some of our actual and prospective products may be eligible up to 10 years of market exclusivity, which includes 8 years data exclusivity and 2 years market exclusivity. In addition to any granted patents, REL-1017 will be eligible for market exclusivity to run concurrently with the term of the patent for 5 years in the U.S.
In the European Union, some of our prospective products may be eligible up to 10 years of market exclusivity, which includes 8 years data exclusivity and 2 years market exclusivity. In addition to any granted patents, REL-1017 will be eligible for market exclusivity to run concurrently with the term of the patent for 5 years in the U.S.
In the case of a non-racemic drug containing as an active ingredient a single enantiomer that is contained in a racemic drug approved in another NDA, the NDA for the non-racemic drug may elect to have the single enantiomer not be considered the same active ingredient as that contained in the approved racemic drug and therefore eligible for NCE exclusivity, if certain conditions are met.
In the case of a non-racemic drug containing as an active ingredient a single enantiomer that is contained in a racemic drug approved in another NDA, the applicant for the non-racemic drug may elect, in the NDA, to have the single enantiomer not be considered the same active ingredient as that contained in the approved racemic drug and therefore eligible for NCE exclusivity, if certain conditions are met.
In the study, the REL-1017 treatment arm (n= 113) showed a MADRS reduction of 15.1 points at Day 28 versus 12.9 points for the placebo arm (n=114), which is a clinically meaningful difference of 2.2 points on the MADRS.
In the study, the REL-1017 treatment arm (n= 113) showed a MADRS reduction of 15.1 points at Day 28 versus 12.9 points for the placebo arm (n=114), which is a clinically meaningful difference of 2.3 points on the MADRS.
Department of Health and Human Services (e.g., the Office of Inspector General and the Office for Civil Rights), the U.S. Department of Justice (DOJ) and individual U.S. Attorney offices within the DOJ, and state and local governments.
Department of Health and Human Services (HHS) (e.g., the Office of Inspector General and the Office for Civil Rights), the U.S. Department of Justice (DOJ) and individual U.S. Attorney offices within the DOJ, and state and local governments.
We honor the diversity of our employees—in gender, race/ethnicity, age, gender identity, sexual orientation, socio-economic status, language, nationality, abilities and life experiences. As of December 31, 2022, our employee population was approximately 60% female. Total Rewards and Employee Engagement We maintain a competitive compensation and benefits package including incentive compensation tied to both company and individual performance, and retirement benefits.
We honor the diversity of our employees—in gender, race/ethnicity, age, gender identity, sexual orientation, socio-economic status, language, nationality, abilities and life experiences. As of December 31, 2023, our employee population was approximately 60% female. Total Rewards and Employee Engagement We maintain a competitive compensation and benefits package including incentive compensation tied to both company and individual performance, and retirement benefits.
Relmada will also pay Licensor tiered payments up to a maximum of 20%, and decreasing to 17.5%, and 15% in certain circumstances, of all consideration received by Relmada for sublicenses granted under the License Agreement. As of December 31, 2022, no events have occurred, and the Company continues to pay Licensor $45,000 every three months.
Relmada will also pay Licensor tiered payments up to a maximum of 20%, and decreasing to 17.5%, and 15% in certain circumstances, of all consideration received by Relmada for sublicenses granted under the License Agreement. As of December 31, 2023, no events have occurred, and the Company continues to pay Licensor $45,000 every three months.
Wonpung has exclusive territorial rights in countries it selects in Asia to market up to two drugs the Company is currently developing and a right of first refusal (“ROFR”) for up to an additional five drugs that the Company may develop in the future as defined in more detail in the license agreement.
Wonpung has exclusive territorial rights in countries it selects in Asia to market up to two drugs the Company is currently developing and a right of first refusal (ROFR) for up to an additional five drugs that the Company may develop in the future as defined in more detail in the license agreement.
As of December 31, 2022, the Company has not generated any revenue related to this license agreement. 4 Inturrisi / Manfredi In January 2018, we entered into an Intellectual Property Assignment Agreement (the Assignment Agreement) and License Agreement (the License Agreement and together with the Assignment Agreement, the Agreements) with Dr. Charles E. Inturrisi and Dr.
As of December 31, 2023, the Company has not generated any revenue related to this license agreement. 4 Inturrisi / Manfredi In January 2018, we entered into an Intellectual Property Assignment Agreement (the Assignment Agreement) and License Agreement (the License Agreement and together with the Assignment Agreement, the Agreements) with Dr. Charles E. Inturrisi and Dr.
We have also secured an Orphan Drug Designation from the FDA for d-methadone for “the treatment of postherpetic neuralgia,” (postherpetic neuralgia is lasting pain in areas of skin affected by previous outbreaks of shingles, caused by the varicella-zoster, or herpes zoster, virus). which, upon NDA approval, carries 7-year FDA Orphan Drug marketing exclusivity.
We have also secured an Orphan Drug Designation from the FDA for d-methadone for “the treatment of postherpetic neuralgia” (postherpetic neuralgia is lasting pain in areas of skin affected by previous outbreaks of shingles, caused by the varicella-zoster, or herpes zoster, virus) which, upon potential NDA approval, carries 7-year FDA Orphan Drug marketing exclusivity.
We seek to determine compensation on the basis of merit and without regard to demographic characteristics. During 2022, we employed a third-party consultant to assist us in evaluating our pay practices. In conducting this exercise, we found no meaningful difference in compensation based upon gender, race or any other defining characteristic examined.
We seek to determine compensation on the basis of merit and without regard to demographic characteristics. During 2023, we employed a third-party consultant to assist us in evaluating our pay practices. In conducting this exercise, we found no meaningful difference in compensation based upon gender, race or any other defining characteristic examined. 12
A vailable Information Reports we file with the Securities and Exchange Commission (SEC) pursuant to the Exchange Act of 1934, as amended (the Exchange Act), including annual and quarterly reports, and other reports we file, can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street NE, Washington, D.C. 20549.
Available Information Reports we file with the Securities and Exchange Commission (SEC) pursuant to the Exchange Act of 1934, as amended (the Exchange Act), including annual and quarterly reports, and other reports we file, can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street NE, Washington, D.C. 20549.
A single Phase 3 trial with other confirmatory evidence may be sufficient in rare instances, such as where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible.
A single Phase 3 trial with other confirmatory evidence may be sufficient in rare instances, such as (i) where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (ii) when in conjunction with other confirmatory evidence.
Exclusivity Upon NDA approval of a new chemical entity (NCE) such as esmethadone, which is a drug that contains no active moiety that has been approved by FDA in any other NDA, that drug receives five years of marketing exclusivity during which FDA cannot receive any ANDA seeking approval of a generic version of that drug.
Exclusivity Upon NDA approval of a NCE such as esmethadone, which is a drug that contains no active moiety that has been approved by FDA in any other NDA, that drug receives five years of marketing exclusivity during which FDA cannot receive any ANDA seeking approval of a generic version of that drug.
Human Capital As of December 31, 2022, we had a total of 14 employees. We understand people are our greatest asset and that our innovation and operational excellence are ultimately noted in our human capital. Our success depends in large part on our ability to recruit, develop and retain a qualified, productive, and engaged workforce.
Human Capital As of December 31, 2023, we had a total of 20 employees. We understand people are our greatest asset and that our innovation and operational excellence are ultimately noted in our human capital. Our success depends in large part on our ability to recruit, develop and retain a qualified, productive, and engaged workforce.
Still other states require the posting of information relating to clinical studies and their outcomes. Some states require the reporting of certain drug pricing information, including information pertaining to and justifying price increases. In addition, certain states require pharmaceutical companies to implement compliance programs and/or marketing codes.
Still other states require the posting of information relating to clinical studies and their outcomes. Some states require the reporting of certain drug pricing information, including information pertaining to and justifying price increases and new high-cost drug introductions. In addition, certain states require pharmaceutical companies to implement compliance programs and/or marketing codes.
Practitioners such as pharmacies and physicians, as well as other types of entities that handle controlled substances, such as researchers and analytical laboratories, are also subject to DEA registration, recordkeeping, reporting, and security requirements on the receipt, storage, and dispensing of controlled substances. The CSA also imposes quota requirements on certain controlled substances.
Practitioners such as pharmacies and physicians, as well as other types of entities that handle controlled substances, such as researchers and analytical laboratories, are also subject to DEA registration, recordkeeping, reporting, and security requirements on the receipt, storage, and dispensing of controlled substances.
We will collaborate with Arbormentis, LLC on the development of new therapies targeting neurological and psychiatric disorders, leveraging its understanding of neuroplasticity, and focusing on this emerging new class of drugs targeting the neuroplastogen mechanism of action. Importantly, neuroplasticity also plays a key role in the activity of REL-1017, Relmada’s lead program. Dr.
We will collaborate with Arbormentis, LLC on the development of new therapies targeting neurological, psychiatric and metabolic disorders. We will leverage Arbormentis’ understanding of neuroplasticity, and focusing on this emerging new class of drugs targeting the neuroplastogen mechanism of action. Importantly, neuroplasticity also plays a key role in the activity of REL-1017, Relmada’s lead program. Dr.
If the parties cannot agree to terms of a license agreement then the Company shall be able to engage in discussions with other potential licensors. As of March 23, 2023, no discussions are active between the Company and Wonpung.
If the parties cannot agree to terms of a license agreement then the Company shall be able to engage in discussions with other potential licensors. As of March 19, 2024, no discussions are active between the Company and Wonpung.
Some of the notable drugs produced by these companies are Cymbalta ® (Eli Lilly), Effexor ® (Pfizer), Pristiq ® (Pfizer), Zulresso ® (Sage), Spravato ® (Johnson & Johnson) and Auvelity ® (Axsome).
Some of the notable drugs produced by these companies are Cymbalta ® (Eli Lilly), Effexor ® (Pfizer), Pristiq ® (Pfizer), ZURZUVANE TM (Sage), Spravato ® (Johnson & Johnson) and Auvelity TM (Axsome).
Our Development Program Esmethadone (d-Methadone, dextromethadone, REL-1017) as a treatment for MDD Background In 2014, the National Institute of Mental Health (NIMH) estimated that 15.7 million adults aged 18 or older in the United States had at least one major depressive episode in the past year.
Our Development Program Esmethadone (d-Methadone, dextromethadone, REL-1017) as a treatment for MDD Background In 2021, the National Institute of Mental Health (NIMH) estimated that 21.0 million adults aged 18 or older in the United States had at least one major depressive episode in the past year.
(Hatch Waxman Act) plus additional 6 month of pediatric exclusivity and up to 10 years of exclusivity in the European Union. We believe an extensive intellectual property estate of US and foreign patents and applications, once approved, will protect our technology and products.
(Hatch Waxman Act) and may be eligible for an additional 6 months of pediatric exclusivity and up to 10 years of exclusivity in the European Union. We believe an extensive intellectual property estate of US and foreign patents and applications, once approved, will protect our technology and products.
The study also showed a nominally statistically significant difference in the response rate, with a response rate of 39.8% in the REL-1017 arm vs 27.2% in the placebo arm (p Patients who complete the RELIANCE trials are eligible to rollover into the long-term, open-label study, which also is expected to include subjects who had not previously participated in a REL-1017 clinical trial.
The study also showed a nominally statistically significant difference in the response rate, with a response rate of 39.8% in the REL-1017 arm vs 27.2% in the placebo arm (p Patients who completed the RELIANCE trials were eligible to rollover into the long-term, open-label study, Study 310, which also included subjects who had not previously participated in a REL-1017 clinical trial.
Further, pursuant to the Patient Protection and Affordable Care Act (ACA), the Centers for Medicare & Medicaid Services (CMS), has issued a final rule that requires manufacturers of prescription drugs to collect and report information on certain payments or transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advance practice nurses and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
Further, pursuant to the federal Physician Payment Sunshine Act, CMS, has issued a final rule that requires manufacturers of prescription drugs to collect and report information on certain payments or transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advance practice nurses and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
The most stringent requirements apply to manufacturers of Schedule I and Schedule II substances. For example, manufacturers and distributors must store Schedule I and II drugs in secure vault with specific structural requirements. Other physical security requirements that apply to all controlled substances include safes and cages, and the use of alarm systems and surveillance cameras.
For example, manufacturers and distributors must store Schedule I and II drugs in secure vault with specific structural requirements. Other physical security requirements that apply to all controlled substances include safes and cages, and the use of alarm systems and surveillance cameras. Regulations also require that registrants restrict employee access to controlled substances.
In most cases, FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug.
In most cases, FDA requires two adequate and well-controlled Phase 3 clinical trials, each convincing on its own, to demonstrate the efficacy of the drug.
In addition, in order to support potential regulatory submissions seeking approval for REL-1017 as monotherapy and adjunctive treatment, the FDA confirmed that, based on what is known at this time, Relmada will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data have been generated to date.
In addition, on October 4, 2021, Relmada announced that in order to support potential regulatory submissions seeking approval for REL-1017 as adjunctive and monotherapy treatment, the Food and Drug Administration (FDA) confirmed that, based on what was known at the time, Relmada would not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data had been generated to date.
For instance, FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet.
For instance, FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.
Drug manufacturers and certain of their subcontractors are required to register their establishments with FDA and certain state agencies. Registration with FDA subjects entities to periodic unannounced inspections by FDA, during which the Agency inspects manufacturing facilities to assess compliance with cGMPs.
In addition, quality control, drug manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with FDA and certain state agencies. Registration with FDA subjects entities to periodic unannounced inspections by FDA, during which the Agency inspects manufacturing facilities to assess compliance with cGMPs.
Currently, none of our product candidates have been approved for sale in the United States or elsewhere. We have no commercial products nor do we have a sales or marketing infrastructure.
We are also developing a novel modified release formulation of psilocybin for the treatment of metabolic indications. Currently, none of our product candidates have been approved for sale in the United States or elsewhere. We have no commercial products nor do we have a sales or marketing infrastructure.
Marco Pappagallo, our Acting Chief Clinical Officer, are among the scientists affiliated with Arbormentis, LLC. 5 Key Strengths We believe that the key elements for our market success include: ● Compelling lead product opportunity, REL-1017 currently in the second of three Phase 3 trials for the adjunctive treatment of MDD. ● Robust and highly statistically significant, efficacy seen with esmethadone in a randomized Phase 2 trial with the primary endpoint at 7 days, with onset of action seen at 4 days, and the effect carrying through to 14 days (7 days post treatment). ● Successful Phase 1 safety studies of esmethadone and strong clinical activity signal in depression established in three independent animal models in preclinical studies. ● Potential in additional multiple indications in underserved markets with large patient population in other affective disorders, and cognitive disorders. ● Scientific support of leading experts: Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions such as Harvard, Cornell, Yale, and University of Pennsylvania. ● Substantial IP portfolio and market protection: approved and filed patent applications provide coverage beyond 2033.
Marco Pappagallo, Safety/Adjudication Officer, are among the scientists affiliated with Arbormentis, LLC. 5 Key Strengths We believe that the key elements for our market success include: ● Compelling lead product opportunity, REL-1017 currently in two Phase 3 trials for the adjunctive treatment of MDD (RELIANCE II and RELIGHT) that build on the knowledge gleaned from RELIANCE I, which did not meet its primary endpoint. ● Robust and highly statistically significant, efficacy seen with esmethadone in a randomized Phase 2 trial with the primary endpoint at 7 days, with onset of action seen at 4 days, and the effect carrying through to 14 days (7 days post treatment). ● Successful Phase 1 safety studies of esmethadone and strong clinical activity signal in depression established in three independent animal models in preclinical studies. ● Potential in additional multiple indications in underserved markets with large patient population in other affective disorders, and cognitive disorders. ● Substantial esmethadone IP portfolio and market protection: approved and filed patent applications provide coverage beyond 2033. ● Portfolio diversification with the development of a novel psilocybin (REL-P11) for the treatment of metabolic indications.
The DEA conducts cyclic inspections of manufacturers, distributors, importers, and exporters to review compliance with the CSA and DEA regulations including security, record keeping and reporting prior to issuing a controlled substance registration. The specific security requirements vary by the type of business activity and the schedule and quantity of controlled substances handled by the registrant.
CSA and DEA regulations including security, record keeping and reporting prior to issuing a controlled substance registration. The specific security requirements vary by the type of business activity and the schedule and quantity of controlled substances handled by the registrant. The most stringent requirements apply to manufacturers of Schedule I and Schedule II substances.
The various states, commonwealths, and the District of Columbia, also regulate controlled substances and impose similar licensing, recordkeeping, and reporting requirements on entities that handle controlled substances.
The various states, commonwealths, and the District of Columbia, also regulate controlled substances and impose similar licensing, recordkeeping, and reporting requirements on entities that handle controlled substances. Entities must independently comply with the various state requirements in addition to the federal controlled substance requirements.
FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients.
Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to FDA as part of the IND. 6 FDA may not permit a clinical trial to begin, or may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients.
According to data from nationally representative surveys supported by NIMH, only about half of Americans diagnosed with major depression in a given year receive treatment.
According to data from nationally representative surveys supported by NIMH, about 61% of adult Americans diagnosed with major depression received treatment in 2021.
We had net loss of approximately $157,043,800 and $125,751,800 for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022, we had an accumulated deficit of approximately $462,110,900.
We had net loss of approximately $98,791,700 and $157,043,800 for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, we had an accumulated deficit of approximately $560,902,700.
The FDA also confirmed that Relmada does not need to conduct a Thorough QT analysis (TQT) cardiac study in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data provided so far and the data generated by the Phase 3 program will be adequate to evaluate the cardiac safety profile of REL-1017.
The FDA also confirmed that Relmada would not need to conduct a TQT cardiac study in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data already provided and the data to be generated by the Phase 3 program would be adequate to evaluate the cardiac safety profile of REL-1017. 1 On August 9, 2022, Relmada announced that the FDA granted Fast Track designation to REL-1017 as a monotherapy for the treatment of MDD.
On October 4, 2021, Relmada announced the initiation of RELIANCE III study, a monotherapy trial for the Company’s lead product candidate, REL-1017. On August 9, 2022, Relmada announced that the FDA granted Fast Track designation to REL-1017 as a monotherapy for the treatment of MDD.
On October 4, 2021, Relmada announced the initiation of RELIANCE III study, a monotherapy trial for the Company’s lead product candidate, REL-1017.
Esmethadone (d-methadone, dextromethadone, REL-1017) in other indications While our current strategy is currently to focus on the further development of esmethadone as an adjunctive treatment for MDD, we may in the future re-commence testing of esmethadone as a monotherapy for MDD.
Esmethadone (d-methadone, dextromethadone, REL-1017) in other indications While our current strategy is currently to focus on the further development of esmethadone as an adjunctive treatment for MDD, we are evaluating other indications that Relmada may explore in the future, including restless leg syndrome and other glutamatergic system activation related diseases.
Certain states and local jurisdictions also require the registration of pharmaceutical sales and medical representatives. Compliance with these laws is difficult and time consuming, and companies that do not comply with these state laws face civil penalties. Efforts to ensure that business arrangements with third parties comply with applicable healthcare laws and regulations involve substantial costs.
Certain states and local jurisdictions also require the registration of pharmaceutical sales and medical representatives. Compliance with these laws is difficult and time consuming, and companies that do not comply with these state laws may face civil penalties. Data privacy and security regulations by both the federal government and the states in which business is conducted may also be applicable.
Fast Track Designation FDA is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition.
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing NDAs. 7 Fast Track Designation FDA is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition.
Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. 7 Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented.
Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented.
Data privacy and security regulations by both the federal government and the states in which business is conducted may also be applicable. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and its implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information.
Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and its implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information.
FDA also may require post-marketing testing, known as Phase 4 testing, REMS and surveillance to monitor the effects of an approved product, or FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, quality control, drug manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval.
Adverse event reporting and submission of periodic reports are required following FDA approval of an NDA. FDA also may require post-marketing testing, known as Phase 4 testing, REMS and surveillance to monitor the effects of an approved product, or FDA may place conditions on an approval that could restrict the distribution or use of the product.
Entities must independently comply with the various state requirements in addition to the federal controlled substance requirements. 10 Other Healthcare Laws In the United States, biotechnology company activities are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare& Medicaid Services (CMS), other divisions of the U.S.
Because psilocybin is classified as a Schedule I controlled substance under the UN Convention on Psychotropic Substances, 1971 most countries maintain laws and regulations comparable to those in the United Stated related to methadone, psilocybin and other controlled substances. 10 Other Healthcare Laws In the United States, biotechnology company activities are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare& Medicaid Services (CMS), other divisions of the U.S.
The AEs observed in the Phase 2a clinical study were of the same nature as those observed in the Phase 1 clinical studies in d-Methadone, and there was no evidence of either treatment induced psychotomimetic and dissociative AEs or withdrawal signs and symptoms upon treatment discontinuation. 1 Phase 3 Program On December 20, 2020, Relmada announced that the first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) for the Company’s lead product candidate, REL-1017, as an adjunctive treatment for MDD.
The AEs observed in the Phase 2a clinical study were of the same nature as those observed in the Phase 1 clinical studies of d-Methadone, and there was no evidence of either treatment induced psychotomimetic and dissociative AEs or withdrawal signs and symptoms upon treatment discontinuation.
Manufacturers and distributors must also submit regular reports to the DEA of the distribution of Schedule I and II controlled substances, Schedule III narcotic substances, and certain other designated substances. All DEA registrants must report any controlled substance thefts or significant losses and must obtain authorization to destroy or dispose of controlled substances.
All DEA registrants must report any controlled substance thefts or significant losses and must obtain authorization to destroy or dispose of controlled substances.
Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payor knows or should know is likely to influence the beneficiary to order a receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which prohibits, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises of any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.
Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payor knows or should know is likely to influence the beneficiary to order a receive a reimbursable item or service from a particular supplier.
Regulations also require that registrants restrict employee access to controlled substances. Once registered, manufacturing, distribution, exporting or importing facilities must maintain records documenting the manufacture, receipt, distribution, import, or export of all controlled substances.
Once registered, manufacturing, distribution, exporting or importing facilities must maintain records documenting the manufacture, receipt, distribution, import, or export of all controlled substances. Manufacturers and distributors must also submit regular reports to the DEA of the distribution of Schedule I and II controlled substances, Schedule III narcotic substances, and certain other designated substances.
In addition, state laws govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. 11 Healthcare Reform Healthcare reforms that have been adopted, and that may be adopted in the future, could result in further reductions in coverage and levels of reimbursement for pharmaceutical products, increases in rebates payable under U.S. government rebate programs and additional downward pressure on pharmaceutical product prices.
Colorado enacted the Colorado Privacy Act, and Connecticut enacted the Connecticut Data Privacy Act, each of which took effect on July 1, 2023, and Utah enacted the Consumer Privacy Act, which became effective on December 31, 2023, and each of these laws may increase the complexity, variation in requirements, restrictions, and potential legal risks. 11 Healthcare Reform Healthcare reforms that have been adopted, and that may be adopted in the future, could result in further reductions in coverage and levels of reimbursement for pharmaceutical products, increases in rebates payable under U.S. government rebate programs and additional downward pressure on pharmaceutical product prices.
The law and regulations require those individuals or entities that handle controlled substances to comply with these requirements in order to ensure legitimate use and prevent the diversion of controlled substances to illicit channels of commerce. Facilities that manufacture, distribute, import or export any controlled substance must register annually with the DEA.
The law and regulations require those individuals or entities that handle controlled substances to comply with these requirements in order to ensure legitimate use and prevent the diversion of controlled substances to illicit channels of commerce. 9 The CSA classifies controlled substances into one of five schedules – Schedule I, II, III, IV, or V – depending on the potential for abuse and physical or psychological dependence.
Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy.
Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
In addition, we are evaluating other indications that Relmada may explore in the future, including restless leg syndrome and other glutamatergic system activation related diseases. 3 Our Corporate History and Background We are a clinical-stage, publicly traded biotechnology company developing New Chemical Entities (NCEs) and novel versions of drug products that potentially address areas of high unmet medical need in the treatment of depression and other CNS diseases.
Specifically, in a rodent model of metabolic dysfunction-associated steatotic liver disease (MASLD), beneficial effects of psilocybin were observed on multiple metabolic parameters, including reduced hepatic steatosis, reduced body weight gain, and fasting blood glucose levels. 3 Our Corporate History and Background We are a clinical-stage, publicly traded biotechnology company developing NCEs and novel versions of drug products that potentially address areas of high unmet medical need in the treatment of depression and other CNS diseases.
Generic Competition In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose claims cover the applicant’s product.
FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including investigation by federal and state authorities. 8 Generic Competition In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose claims cover the applicant’s product.
However, certain DEA registrations permit coincident activities without obtaining a separate DEA registration, such as authorizing a manufacturer to also distribute controlled substances produced by that registrant. The CSA classifies controlled substances into one of five schedules – Schedule I, II, III, IV, or V – depending on the potential for abuse and physical or psychological dependence.
However, certain DEA registrations permit coincident activities without obtaining a separate DEA registration, such as authorizing a manufacturer to also distribute controlled substances produced by that registrant. The CSA and DEA regulations impose certain security, recordkeeping and reporting requirements on DEA registrants. The DEA conducts cyclic inspections of manufacturers, distributors, importers, and exporters to review compliance with these requirements.
Healthcare reform proposals recently culminated in the enactment of the Inflation Reduction Act (IRA), which will, among other things, allow the Department of Health and Human Services (HHS) to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D (excluding drugs and biologics that are designated and approved for only one rare disease or condition), although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Removed
On October 15, 2019, we reported top-line data from study REL-1017-202.
Added
On October 15, 2019, we reported top-line data from study REL-1017-202. During late 2022, we announced RELIANCE I and III, both Phase 3 trials, did not achieve their primary endpoints. Relmada has completed its long term, open label study and plans to complete two additional ongoing adjunctive Phase 3 trials (RELIANCE II and RELIGHT).
Removed
This was a double-blind, placebo-controlled Phase 2 clinical trial evaluating the safety, tolerability and efficacy of two oral doses of REL-1017, 25 mg once a day and 50 mg once a day, as an adjunctive treatment in patients with major depressive disorder (MDD), who experienced an inadequate response to 1 to 3 adequate antidepressant treatments with an antidepressant medication.
Added
Relmada also intends, in 2024, to enter human studies of its proprietary, modified-release formulation of psilocybin (REL-P11) in doses that we believe are lower than those associated with psychedelic effects for metabolic indications.
Removed
Consistent results are seen for the secondary endpoints. Key Upcoming Anticipated Milestones We expect multiple key milestones over the next 12-18 months.
Added
Phase 3 Program On December 20, 2020, Relmada announced that the first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) for the Company’s lead product candidate, REL-1017, as an adjunctive treatment for Major Depressive Disorder (MDD).
Removed
These include: ● Results of RELIANCE II, the second of two adjunctive MDD trials, in the first half of 2024. ● Initiation of a new Phase III adjunctive MDD trial in mid-2023 with completion anticipated in the second half of 2024. ● Results of RELIANCE – OLS (Long-term, Open-label) study in MDD in mid-2023.
Added
This rollover study completed subject visits on July 11, 2023. On September 20, 2023, Relmada announced efficacy results for the de novo (or new to treatment) patients (204 patients) and safety results for all subjects (627 patients) from Study 310 of REL-1017 in patients with MDD.
Removed
Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to FDA as part of the IND.
Added
Patients treated daily with REL-1017 for up to one year experienced rapid, clinically meaningful, and sustained improvements in depressive symptoms and associated functional impairment. REL-1017 was well-tolerated with long-term dosing, showing low rates of adverse events and discontinuations due to adverse events. The most commonly reported adverse events deemed to be treatment-related all occurred included headache, nausea and dizziness.
Removed
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing NDAs.
Added
No new safety signals were detected. On August 23, 2023, Relmada announced the dosing of the first patient in RELIGHT, a Phase 3 clinical trial for REL-1017, as an adjunctive treatment for MDD.
Removed
Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling. 8 Adverse event reporting and submission of periodic reports are required following FDA approval of an NDA.
Added
Consistent results are seen for the secondary endpoints. Psilocybin Program (REL-P11): On October 11, 2023, Relmada announced that it intends to enter human studies of its proprietary, modified-release formulation of psilocybin (REL-P11) for metabolic indications in doses that we believe are lower than those associated with psychedelic effects.
Removed
If a drug company’s operations are found to be in violation of any such requirements, it may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of its operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other federal or state government healthcare programs, including Medicare and Medicaid, integrity oversight and reporting obligations, imprisonment, and reputational harm.
Added
The Company plans to commence a single-ascending dose Phase 1 trial in obese patients in the first half of 2024 to define the pharmacokinetic, safety and tolerability profile of Relmada’s modified-release psilocybin formulation (REL-P11) in this population, followed by a Phase 2a trial to establish clinical proof-of-concept.
Removed
Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action for an alleged or suspected violation can cause a drug company to incur significant legal expenses and divert management’s attention from the operation of the business, even if such action is successfully defended.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese initiatives recently culminated in the enactment of the Inflation Reduction Act, or IRA, in August 2022, which, among other things, will allow HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D (excluding drugs and biologics that are designated and approved for only one rare disease or condition), although only high-expenditure single-source biologics that have been approved for at least 11 years (7 years for drugs) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Biggest changeOnly high-expenditure single-source biologics that have been approved for at least 11 years (7 years for single-source drugs) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
We may be unable to conduct future clinical trials at preferred sites, enlist clinical investigators, enroll sufficient numbers of participants or begin or successfully complete clinical trials in a timely fashion, if at all.
We may be unable, if at all, to conduct future clinical trials at preferred sites, enlist clinical investigators, enroll sufficient numbers of participants or begin or successfully complete clinical trials in a timely fashion.
We may not be successful in hiring and retaining key employees. Our future operations and successes depend in large part upon the continued service of key members of our senior management team whom we are highly dependent upon to manage our business, specifically Dr. Sergio Traversa, our Chief Executive Officer, Dr. Paolo Manfredi, Acting Chief Scientific Officer, and Dr.
We may not be successful in hiring and retaining key employees. Our future operations and successes depend in large part upon the continued service of key members of our senior management team whom we are highly dependent upon to manage our business, specifically Dr. Sergio Traversa, our Chief Executive Officer, and Dr. Paolo Manfredi, Acting Chief Scientific Officer.
Lengthy delays in the completion of clinical trials of our products would adversely affect our business and prospects and could cause us to cease operations. On November 29, 2006, the FDA required a boxed warning to be added to the Prescribing Information for racemic methadone, a parent compound to our esmethadone related to cardiac death.
Lengthy delays in the completion of clinical trials of our products would adversely affect our business and prospects and could cause us to cease operations. On November 29, 2006, the FDA required a boxed warning to be added to the Prescribing Information related to cardiac death for racemic methadone, a parent compound to our esmethadone.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● the federal Physician Payment Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report payments and other transfers of value provided during the previous year to physicians, as defined by such law, physician assistants, certain types of advance practice nurses, and teaching hospitals, as well as certain ownership and investment interests held by such physicians and their immediate family, which includes annual data collection and reporting obligations; ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and ● some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. 27 Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● the federal Physician Payment Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report payments and other transfers of value provided during the previous year to physicians, as defined by such law, physician assistants, certain types of advance practice nurses, and teaching hospitals, as well as certain ownership and investment interests held by such physicians and their immediate family, which includes annual data collection and reporting obligations; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures or drug pricing. 27 Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
The future regulatory and commercial success of esmethadone is subject to a number of risks, including the following: ● we may not be able to obtain adequate evidence from clinical trials to support the efficacy and safety for esmethadone for the adjunctive treatment of MDD, monotherapy for MDD, or other indications; ● we may not be able to demonstrate that the benefits of esmethadone for the adjunctive treatment of MDD, monotherapy for MDD, or other indications outweigh the risks; ● in our clinical trials for esmethadone, enrollment may be slower than anticipated and we may need additional clinical trial sites than originally planned, which could delay our clinical trial progress; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for marketing approval; ● patients in our clinical trials may suffer serious adverse effects for reasons that may or may not be related to esmethadone, which could delay or prevent further clinical development; ● the standards implemented by clinical or regulatory agencies may change at any time and we cannot be certain what efficacy endpoints the FDA or foreign clinical or regulatory agencies may require in pivotal clinical trials with respect to the adjunctive treatment of MDD, monotherapy for MDD, or any other indication for the approval of esmethadone; ● the results of later stage clinical trials may not be as favorable as the results we have observed to date in our preclinical studies and Phase 1 and 2 clinical trials; ● we cannot be certain of the number and type of clinical trials and preclinical or toxicology studies that the FDA or other regulatory agencies will require in order to approve esmethadone for the adjunctive treatment of MDD, monotherapy for MDD, or any other indication; ● we may not have sufficient financial and other resources to complete the necessary clinical trials for esmethadone, including, but not limited to, the clinical trials needed to obtain drug approval; ● if approved for the adjunctive treatment of MDD, monotherapy for MDD, esmethadone will likely compete with products that may reach approval prior to esmethadone, products that are currently approved for the adjunctive treatment of MDD, monotherapy for MDD, and the off-label use of currently marketed products for MDD; and ● we may not be able to obtain, maintain or enforce our patents and other intellectual property rights.
The future regulatory and commercial success of esmethadone is subject to a number of risks, including the following: ● we may not be able to obtain adequate evidence from clinical trials to support the efficacy and safety for esmethadone for the adjunctive treatment of MDD or other indications; ● we may not be able to demonstrate that the benefits of esmethadone for the adjunctive treatment of MDD or other indications outweigh the risks; ● in our clinical trials for esmethadone, enrollment may be slower than anticipated and we may need additional clinical trial sites than originally planned, which could delay our clinical trial progress; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for marketing approval; ● patients in our clinical trials may suffer serious adverse effects for reasons that may or may not be related to esmethadone, which could delay or prevent further clinical development; ● the standards implemented by clinical or regulatory agencies may change at any time and we cannot be certain what efficacy endpoints the FDA or foreign clinical or regulatory agencies may require in pivotal clinical trials with respect to the adjunctive treatment of MDD or any other indication for the approval of esmethadone; ● the results of later stage clinical trials may not be as favorable as the results we have observed to date in our preclinical studies and Phase 1 and 2 clinical trials; ● we cannot be certain of the number and type of clinical trials and preclinical or toxicology studies that the FDA or other regulatory agencies will require in order to approve esmethadone for the adjunctive treatment of MDD or any other indication; ● we may not have sufficient financial and other resources to complete the necessary clinical trials for esmethadone, including, but not limited to, the clinical trials needed to obtain drug approval; ● if approved for the adjunctive treatment of MDD, esmethadone will likely compete with products that may reach approval prior to esmethadone, products that are currently approved for the adjunctive treatment of MDD and the off-label use of currently marketed products for MDD; and ● we may not be able to obtain, maintain or enforce our patents and other intellectual property rights.
If we are unable to obtain regulatory approval for and successfully commercialize REL-1017 or other future product candidates, or we experience significant delays in doing so, our business will be materially harmed. To date, the primary focus of our product development has been esmethadone (d-methadone, dextromethadone, REL-1017) for the adjunctive and monotherapy treatment of patients with MDD.
If we are unable to obtain regulatory approval for and successfully commercialize REL-1017 or other future product candidates, or we experience significant delays in doing so, our business will be materially harmed. To date, the primary focus of our product development has been esmethadone (d-methadone, dextromethadone, REL-1017) for the adjunctive treatment of patients with MDD.
As a result, without further stockholder approval, the board of directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, preferred stockholders could make it more difficult for a third party to acquire us. We are also subject to the anti-takeover provisions of the Nevada Revised Statutes (NRS).
As a result, without further stockholder approval, the board of directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, preferred stockholders could make it more difficult for a third party to acquire us. 31 We are also subject to the anti-takeover provisions of the Nevada Revised Statutes (NRS).
Owing in part to the complexity of biological pathways, esmethadone or any future product candidate may not demonstrate in patients the biochemical and pharmacological properties we anticipate based on laboratory studies or earlier stage clinical trials, and they may interact with human biological systems or other drugs in unforeseen, ineffective or harmful ways.
Owing in part to the complexity of biological pathways, esmethadone, psilocybin or any future product candidate may not demonstrate in patients the biochemical and pharmacological properties we anticipate based on laboratory studies or earlier stage clinical trials, and they may interact with human biological systems or other drugs in unforeseen, ineffective or harmful ways.
Even if we believe that the data from our trials will support marketing approval in the United States or in Europe, we cannot predict whether the agencies will agree with our analysis and approve our applications. 19 Developments by competitors may establish standards of care that affect our ability to conduct our clinical trials as planned.
Even if we believe that the data from our trials will support marketing approval in the United States or in Europe, we cannot predict whether the agencies will agree with our analysis and approve our applications. Developments by competitors may establish standards of care that affect our ability to conduct our clinical trials as planned.
We currently rely, and may continue to rely, on third-party contract manufacturers to manufacture APIs, drug products and other components of our product candidates. Reliance on third-party manufacturers may expose us to different risks than if we were to manufacture product candidates ourselves. The manufacturing process for a product candidate is subject to FDA and foreign regulatory authority review.
We currently rely, and may continue to rely, on third-party contract manufacturers to manufacture APIs, drug products and other components of our product candidates. Reliance on third-party manufacturers may expose us to different risks than if we were to manufacture product candidates ourselves. 28 The manufacturing process for a product candidate is subject to FDA and foreign regulatory authority review.
Esmethadone and any future product candidates will be subject to rigorous and extensive clinical trials and extensive regulatory approval processes implemented by the FDA and comparable foreign regulatory authorities before obtaining marketing approval from these regulatory authorities, if at all. The drug development and approval process is lengthy and expensive, and approval is never certain.
Esmethadone, psilocybin and any future product candidates will be subject to rigorous and extensive clinical trials and extensive regulatory approval processes implemented by the FDA and comparable foreign regulatory authorities before obtaining marketing approval, if at all, from these regulatory authorities. The drug development and approval process is lengthy and expensive, and approval is never certain.
These factors would increase our reliance on such manufacturers or require us to obtain a license from such manufacturers in order to enable us, or to have other third parties, manufacture our product candidates. 28 We expect to continue to rely on third-party manufacturers if we receive regulatory approval for any product candidate.
These factors would increase our reliance on such manufacturers or require us to obtain a license from such manufacturers in order to enable us, or to have other third parties, manufacture our product candidates. We expect to continue to rely on third-party manufacturers if we receive regulatory approval for any product candidate.
Our product candidates contain controlled substances, the supply of which may be limited by U.S. statutes and regulations, and the use of which may generate public controversy. The active ingredients in esmethadone are listed by the CSA and regulations promulgated by the DEA as controlled substances.
Our product candidates contain controlled substances, the supply of which may be limited by U.S. statutes and regulations, and the use of which may generate public controversy. The active ingredients in esmethadone and psilocybin are listed by the CSA and regulations promulgated by the DEA as controlled substances.
The results of preclinical studies and early clinical trials of esmethadone or any future product candidate may not be predictive of the results of later-stage clinical studies or trials and the results of studies or trials in one set of patients or line of treatment may not be predictive of those obtained in another.
The results of preclinical studies and early clinical trials of esmethadone, psilocybin or any future product candidate may not be predictive of the results of later-stage clinical studies or trials and the results of studies or trials in one set of patients or line of treatment may not be predictive of those obtained in another.
If we are unable to successfully demonstrate the safety and efficacy of esmethadone or other future product candidates and receive the necessary regulatory approvals, our business will be materially harmed.
If we are unable to successfully demonstrate the safety and efficacy of esmethadone, psilocybin or other future product candidates and receive the necessary regulatory approvals, our business will be materially harmed.
Serious injury or death resulting from a failure of one of our drug candidates during current or future clinical trials could result in the FDA delaying our clinical trials or denying or delaying clearance or approval of a product.
Serious injury or death resulting from a failure of one of our drug candidates during current or future clinical trials could result in the FDA halting or delaying our clinical trials or denying or delaying clearance or approval of a product.
The net effect of these risks can include reductions in future profits, additional operating expenses, inability to meet liquidity needs, inability to access capital and increased cost of capital. 13 Risk Factors Discussion Risks Related to Our Business Our business depends on the success of esmethadone (d-methadone, dextromethadone, REL-1017), our only product candidate currently in clinical development, which is in a pivotal clinical trials for the adjunctive treatment of MDD.
The net effect of these risks can include reductions in future profits, additional operating expenses, inability to meet liquidity needs, inability to access capital and increased cost of capital. 13 Risk Factors Discussion Risks Related to Our Business Our business depends on the success of esmethadone (d-methadone, dextromethadone, REL-1017), our only product candidate currently in clinical development, which is in a pivotal clinical trial for the adjunctive treatment of MDD.
We currently only have 14 full time employees and are likely to hire additional qualified personnel with expertise in nonclinical pharmacology and toxicology, pharmaceutical development, clinical research, regulatory affairs, manufacturing, sales and marketing. We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions.
We currently only have 16 full time employees and are likely to hire additional qualified personnel with expertise in nonclinical pharmacology and toxicology, pharmaceutical development, clinical research, regulatory affairs, manufacturing, sales and marketing. We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research institutions.
The commencement and completion of clinical trials can be disrupted for a variety of reasons, including difficulties in: ● recruiting and enrolling patients to participate in a clinical trial; ● obtaining regulatory approval to commence a clinical trial; ● reaching agreement on acceptable terms with prospective clinical research organizations and trial sites; ● obtaining approval of the institutional review board (IRB) at each site selected for participation in our clinical trials; ● manufacturing sufficient quantities of a product candidate; ● investigator fraud, including data fabrication by clinical trial personnel; and ● diversion of controlled substances by clinical trial personnel.
The commencement and completion of clinical trials can be disrupted for a variety of reasons, including difficulties in: ● recruiting and enrolling patients to participate in a clinical trial; ● obtaining regulatory approval to commence a clinical trial; ● reaching agreement on acceptable terms with prospective clinical research organizations and trial sites; ● obtaining approval of the IRB at each site selected for participation in our clinical trials; ● manufacturing sufficient quantities of a product candidate; ● investigator fraud, including data fabrication by clinical trial personnel; and ● diversion of controlled substances by clinical trial personnel.
Our ability to protect and enforce our patents does not guaranty that we will secure the right to commercialize our patents. A patent is a limited monopoly right conferred upon an inventor, and his successors in title, in return for the making and disclosing of a new and non-obvious invention.
Our ability to protect and enforce our patents does not guarantee that we will secure the right to commercialize our patents. A patent is a limited monopoly right conferred upon an inventor, and his successors in title, in return for the making and disclosing of a new and non-obvious invention.
Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug for the same disease for seven years.
Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the active ingredient is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same active ingredient for the same disease for seven years.
If a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business. 31
If a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business. 32
In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act; ● HIPAA imposes criminal and civil liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act; ● HIPAA, as amended by HITECH, imposes criminal and civil liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
Successful continued development and ultimate regulatory approval of esmethadone for the adjunctive treatment of MDD, and potentially as a monotherapy for MDD, or other indications is critical to the future success of our business. We have invested, and will continue to invest, a significant portion of our time and financial resources in the clinical development of esmethadone.
Successful continued development and ultimate regulatory approval of esmethadone for the adjunctive treatment of MDD or other indications is critical to the future success of our business. We have invested, and will continue to invest, a significant portion of our time and financial resources in the clinical development of esmethadone.
Our chief competitors include companies such as Johnson and Johnson, Abbvie, Pfizer, Eli Lilly, Sage Therapeutics, and Axsome Therapeutics among others. We may be exposed to liability claims associated with the use of hazardous materials and chemicals. Our research and development activities involve the controlled use of hazardous materials and chemicals.
Our chief competitors include companies such as Johnson and Johnson, Abbvie, Pfizer, Eli Lilly, Axsome Therapeutics, and Neumora Therapeutics, Inc. among others. We may be exposed to liability claims associated with the use of hazardous materials and chemicals. Our research and development activities involve the controlled use of hazardous materials and chemicals.
Although the decision was based on case reports and not on a controlled clinical trial, as part of the development of esmethadone we are and have actively assessed the cardiac safety profile of esmethadone in our Phase 3 clinical trials.
Although the decision was based on case reports and not on a controlled clinical trial, as part of the development of esmethadone, we currently assess (and have actively assessed) the cardiac safety profile of esmethadone in our Phase 3 clinical trials.
If we or any of our future development collaborators are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize esmethadone, we may not be able to generate sufficient revenue to continue our business. Preliminary or top-line results may not accurately reflect the complete results of the clinical study.
If we or any of our future development collaborators are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize esmethadone, psilocybin or other future product candidates, we may not be able to generate sufficient revenue to continue our business. Preliminary or top-line results may not accurately reflect the complete results of the clinical study.
Our clinical trials and our future clinical trials for esmethadone measure clinical symptoms, such as depression that are not biologically measurable.
In addition, our clinical trials and our future clinical trials for esmethadone measure clinical symptoms, such as depression that are not biologically measurable.
With these findings, even if RELIANCE II or additional Phase III studies achieve their primary endpoints, we may not have sufficient evidence to demonstrate the efficacy of REL-1017 as an adjunctive treatment of MDD.
With these findings, even if RELIANCE II, RELIGHT, or any additional Phase 3 studies achieve their primary endpoints, we may not have sufficient evidence to demonstrate the efficacy of REL-1017 as an adjunctive treatment of MDD.
In addition, as a smaller reporting company, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting so long as we remain a smaller reporting company, which could increase the likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers whose independent registered public accounting firms have provided such attestations.
In addition, as a smaller reporting company, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting so long as we remain a smaller reporting company, which could increase the likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers whose independent registered public accounting firms have provided such attestations. 30 Our stock price may be volatile.
In January 2018, we entered into an Intellectual Property Assignment Agreement (the “Assignment Agreement”) and License Agreement (the License Agreement and together with the Assignment Agreement, the Agreements), with Dr. Charles E. Inturrisi and Dr. Paolo Manfredi (collectively, the “Licensor”).
In January 2018, we entered into an Intellectual Property Assignment Agreement (the Assignment Agreement) and License Agreement (the License Agreement and together with the Assignment Agreement, the Agreements), with Dr. Charles E. Inturrisi and Dr. Paolo Manfredi (collectively, the Licensor).
We have very limited drug development experience in other therapeutic areas and we may be unsuccessful in making this change from a depression company to a company with a focus in areas other than depression or a company with a focus in multiple therapeutic areas including depression.
We have very limited drug development experience in other therapeutic areas and we may be unsuccessful in making this change from a depression company to a company with a focus in areas other than depression, such as metabolic disorders with psilocybin, or a company with a focus in multiple therapeutic areas including depression.
Thus, the IRA will likely have a significant impact on the pharmaceutical industry. Further, at the U.S. state level, legislatures are increasingly enacting laws and implementing regulations designed to control pharmaceutical and biological product pricing, including price or reimbursement constraints, discount requirements, marketing cost disclosure and price transparency reporting.
Thus, while it is unclear how the IRA will implemented, it will likely have a significant impact on the pharmaceutical industry. Further, at the U.S. state level, legislatures are increasingly enacting laws and implementing regulations designed to control pharmaceutical and biological product pricing, including price or reimbursement constraints, discount requirements, marketing cost disclosure, price gouging prohibitions, and price transparency reporting.
Cedric O’Gorman, Chief Medical Officer. If any terminates employment with us, such a departure would have a material adverse effect on our business. Our future success also depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical and regulatory personnel.
If either terminates employment with us, such a departure would have a material adverse effect on our business. Our future success also depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical and regulatory personnel.
Currently, esmethadone is our only product candidate under clinical development. This may make an investment in our Company riskier than similar companies that have multiple product candidates in active development and that therefore may be able to better sustain a setback of a lead candidate.
This may make an investment in our Company riskier than similar companies that have multiple product candidates in active development and that therefore may be able to better sustain a setback of a lead candidate.
On December 7, 2022, we announced that the RELIANCE I study did not achieve its primary endpoint, which was a statistically significant improvement in depression symptoms compared to placebo as measured by the MADRS on Day 28.
On December 7, 2022, we announced that the RELIANCE I study, evaluating REL-1017 in the adjunctive setting for MDD, did not achieve its primary endpoint, which was a statistically significant improvement in depression symptoms compared to placebo as measured by the MADRS on Day 28.
Risks related to our business Business risks include risks associated with our products and regulatory approval, licensing agreements, historical losses, managing growth, acquisitions, the COVID-19 pandemic, and Russia’s Invasion of Ukraine. In general, the risks related to our business can cause variability in the future profits of the Company.
Risks related to our business Business risks include risks associated with our products and regulatory approval, licensing agreements, historical losses, managing growth, and acquisitions. In general, the risks related to our business can cause variability in the future profits of the Company.
The FDA’s and other regulatory agencies’ decision to approve our depression product candidate will depend on our ability to demonstrate with substantial clinical evidence through adequate well-controlled clinical trials, that the product candidate is effective, as measured statistically by comparing the overall improvement in depression in actively-treated patients against improvement in depression in the control group (a placebo control).
The FDA’s and other regulatory agencies’ decisions to approve our product candidates will depend on our ability to demonstrate through adequate well-controlled clinical trials, that the product candidate is effective. For esmethadone product candidate, efficacy is measured statistically by comparing the overall improvement in depression in actively-treated patients against improvement in depression in the control group (a placebo control).
In addition, clinical trial results from the study of depression are inherently difficult to predict. Clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous requirements. The clinical trial process also consumes a significant amount of time.
Clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous requirements. The clinical trial process also consumes a significant amount of time.
These market fluctuations may also materially and adversely affect the market price of our common stock. 30 The Nevada Revised Statutes and our articles of incorporation and bylaws contain provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts to replace or remove current management and reduce the market price of our stock.
The Nevada Revised Statutes and our articles of incorporation and bylaws contain provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts to replace or remove current management and reduce the market price of our stock.
Even if our RELIANCE II or other Phase 3 clinical trials are positive, we or our collaborators may have to commit substantial time and additional resources to conducting further preclinical studies and clinical trials before obtaining FDA approval for any of our drug candidates.
Even if our RELIANCE II, RELIGHT or other potential Phase 3 clinical trials are positive, we or our collaborators may have to commit substantial time and additional resources to conducting further preclinical studies and clinical trials before obtaining FDA approval for any of our drug candidates. Clinical trial results from the study of depression are inherently difficult to predict.
There is a risk that federal statutes and DEA regulations concerning applicable quotas may interfere with the supply of the drugs used in clinical trials for our product candidates, and, in the future, the ability to manufacture and distribute esmethadone in the volume needed to meet commercial demand.
There is a risk that federal statutes and DEA regulations concerning applicable quotas may interfere with the supply of the drugs used in clinical trials for our product candidates and the ability to manufacture and distribute our product candidates, if approved, in the volume needed to meet commercial demand. Products containing controlled substances may generate public controversy.
In addition, completion of clinical trials can be delayed by numerous factors, including: ● delays in identifying and agreeing on acceptable terms with prospective clinical trial sites; ● slower than expected rates of patient recruitment and enrollment; ● unanticipated patient dropout rates; and ● increases in time required to complete monitoring of patients during or after participation in a clinical trial.
We do not know whether any of our ongoing or planned clinical trials will result in marketable drugs. 18 In addition, completion of clinical trials can be delayed by numerous factors, including: ● delays in identifying and agreeing on acceptable terms with prospective clinical trial sites; ● slower than expected rates of patient recruitment and enrollment; ● unanticipated patient dropout rates; and ● increases in time required to complete monitoring of patients during or after participation in a clinical trial.
Since inception, we have an accumulated deficit of approximately $462.1 million at December 31, 2022. The Company had cash, cash equivalents and short-term investments of approximately $148.3 million at December 31, 2022.
Since inception, we have an accumulated deficit of approximately $560.9 million at December 31, 2023. The Company had cash, cash equivalents and short-term investments of approximately $96.3 million at December 31, 2023.
Delays in obtaining regulatory approvals would: ● delay commercialization of, and product revenues from, our drug candidates; and ● diminish the competitive advantages that we may have otherwise enjoyed, which would have an adverse effect on our operating results and financial condition. 18 Even if we or our collaborators comply with all FDA regulatory requirements, our drug candidates may never obtain regulatory approval.
Delays in obtaining regulatory approvals would: ● delay commercialization of, and product revenues from, our drug candidates; and ● diminish the competitive advantages that we may have otherwise enjoyed, which would have an adverse effect on our operating results and financial condition.
Failure can occur at any stage of the clinical trials, and we or our collaborators could encounter problems that cause abandonment or repetition of clinical trials. We have a limited history of developing drug candidates. We do not know whether any of our ongoing or planned clinical trials will result in marketable drugs.
Failure can occur at any stage of the clinical trials, and we or our collaborators could encounter problems that cause abandonment or repetition of clinical trials. We have a limited history of developing drug candidates.
Upon approval, the DEA may continue to designate it as a controlled substance falling under a DEA controlled substance schedule. Esmethadone is produced by separation from racemic methadone, a scheduled drug subject to extensive regulation by the DEA.
Although esmethadone is substantially devoid of opioid activity, and psychotomimetic effects, it is currently classified as a Schedule II drug. Upon approval, the DEA may continue to designate it as a controlled substance falling under a DEA controlled substance schedule. Esmethadone is produced by separation from racemic methadone, a scheduled drug subject to extensive regulation by the DEA.
We have not established a formal disaster recovery plan and our back-up operations and our business interruption insurance may not be adequate to compensate us for losses we may suffer. A significant business interruption could result in losses or damages incurred by us and require us to cease or curtail our operations.
We have not established a formal disaster recovery plan and our back-up operations and our business interruption insurance may not be adequate to compensate us for losses we may suffer.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
There can be no assurance that European authorities will grant data exclusivity for esmethadone, because it does not contain a new active molecule. Even if European data exclusivity is granted for esmethadone, this may not protect us from direct competition.
In addition, under the statute, this election currently may only be made in an NDA submitted before October 1, 2027. There can be no assurance that European authorities will grant data exclusivity for esmethadone, because it does not contain a new active molecule. Even if European data exclusivity is granted for esmethadone, this may not protect us from direct competition.
A competitor(s) with a generic version of our product may be able to obtain approval of its product during our product’s period of data exclusivity, by submitting a marketing authorization application (MAA) with a less than full package of nonclinical and clinical data. 21 We may need to focus our future efforts in new therapeutic areas where we have little or no experience.
A competitor(s) with a generic version of our product may be able to obtain approval of its product during our product’s period of data exclusivity, by submitting a marketing authorization application (MAA) with a less than full package of nonclinical and clinical data.
If our drug candidates receive regulatory approval, we and our collaborators will also be subject to ongoing FDA obligations and continued regulatory review, such as continued safety reporting requirements, and we and our collaborators may also be subject to additional FDA post-marketing obligations or new regulations, all of which may result in significant expense and limit our and our collaborators’ ability to commercialize our drugs.
Even if our agreements with any current or future corporate collaborators entitle us to indemnification against product liability losses, such indemnification may not be available or adequate should any claim arise. 19 If our drug candidates receive regulatory approval, we and our collaborators will also be subject to ongoing FDA obligations and continued regulatory review, such as continued safety reporting requirements, and we and our collaborators may also be subject to additional FDA post-marketing obligations or new regulations, all of which may result in significant expense and limit our and our collaborators’ ability to commercialize our drugs.
The DEA requires substantial evidence and documentation of expected legitimate medical and scientific needs before assigning quotas to manufacturers. In future years, we may need greater amounts of controlled substances to sustain our development program, and we will need significantly greater amounts to implement our commercialization plans if the FDA approves our proposed formulations.
In future years, we may need greater amounts of controlled substances to sustain our development program, and we will need significantly greater amounts to implement our commercialization plans if the FDA approves our proposed formulations.
Risks Related to Clinical and Regulatory Matters If we or our potential collaborators fail to obtain the necessary regulatory approvals, or if such approvals are limited, we and our potential collaborators will not be allowed to commercialize our drug candidates, and we will not generate product revenues.
A significant business interruption could result in losses or damages incurred by us and require us to cease or curtail our operations. 17 Risks Related to Clinical and Regulatory Matters If we or our potential collaborators fail to obtain the necessary regulatory approvals, or if such approvals are limited, we and our potential collaborators will not be allowed to commercialize our drug candidates, and we will not generate product revenues.
These shares represent a large number of shares of our common stock, and if sold in the market all at once or at about the same time, could depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital. 29 We are subject to the reporting requirements of federal securities laws, which can be expensive and may divert resources from other projects, thus impairing our ability grow.
These shares represent a large number of shares of our common stock, and if sold in the market all at once or at about the same time, could depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital.
Regulatory approval processes outside the United States generally include all of the aforementioned requirements and risks associated with FDA approval. If we or our collaborators are unable to design, conduct and complete successful clinical trials, our drug candidates will not be able to receive regulatory approval.
If we or our collaborators are unable to design, conduct and complete successful clinical trials, our drug candidates will not be able to receive regulatory approval.
If we or our collaborators fail to obtain regulatory approval for any of our drug candidates we will have fewer commercial products, if any, and corresponding lower product revenues, if any. Even if our drug candidates receive regulatory approval, such approval may involve limitations on the indications and conditions of use or marketing claims for our products.
Even if we or our collaborators comply with all FDA regulatory requirements, our drug candidates may never obtain regulatory approval. If we or our collaborators fail to obtain regulatory approval for any of our drug candidates we will have fewer commercial products, if any, and corresponding lower product revenues, if any.
Esmethadone may require Risk Evaluation and Mitigation Strategies (REMS). Esmethadone, may require REMS. The REMS may include requirements for special labeling or medication guides for patients, special communication plans to health care professionals and restrictions on distribution and use. We cannot predict the specific REMS to be required as part of the FDA’s approval of any of our products.
If approved, esmethadone and any psilocybin-containing drug product we successfully develop may require Risk Evaluation and Mitigation Strategies (REMS). Esmethadone and any psilocybin-containing drug product we successfully develop, may require REMS. The REMS may include requirements for special labeling or medication guides for patients, special communication plans to health care professionals and restrictions on distribution and use.
Risks Related to Ownership of Our Common Stock There is a limited market for our common stock that may make it more difficult to dispose of your stock. Our common stock is currently listed on the Nasdaq Global Select Market under the symbol “RLMD”. There is a limited trading market for our common stock.
Our common stock is currently listed on the Nasdaq Global Select Market under the symbol “RLMD”. There is a limited trading market for our common stock.
The manufacture, shipment, storage, sale and use of controlled substances are highly regulated, including security, recordkeeping and reporting obligations enforced by the DEA. Schedule II substances (as well as substances defined as narcotics in any Schedule) are subject to the strictest regulatory requirements and restrictions involving registration, storage, security, recordkeeping and reporting.
Schedule I and II substances (as well as substances defined as narcotics in any Schedule) are subject to the strictest regulatory requirements and restrictions involving registration, storage, security, recordkeeping and reporting. In particular, distribution and dispensing of Schedule II drugs are strictly controlled.
Our pharmaceutical excipients and other APIs are multisource, although not all sources have an active Drug Master File (DMF) with the FDA. A DMF is a submission to the FDA used to provide confidential detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of drugs to support drug development and approval.
A DMF is a submission to the FDA used to provide confidential detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of drugs to support drug development and approval. In addition, some of the countries for our multisource APIs may not be same as our drug manufacturing locations.
As of December 31, 2022, we had Federal, New York State and New York City net operating loss (NOL) carryforwards of approximately $118,877,000, $74,792,000 and $74,608,000, respectively, which begin expiring in 2028, 2033 and 2033, respectively.
As of December 31, 2023, we had Federal, New York State and New York City net operating loss (NOL) carryforwards of approximately $100,077,000, $15,016,000 and $14,998,000, respectively, which begin expiring in 2027, 2032 and 2032, respectively.
The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. These provisions will take effect progressively starting in 2023, although they may be subject to legal challenges.
The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties.
Even if we do receive regulatory approval to market esmethadone, any such approval may be subject to limitations on the indicated uses or patient populations for which we may market the products. Accordingly, even if we are able to obtain the requisite financing to continue to fund our development programs, we may be unable to successfully develop or commercialize esmethadone.
Even if we do receive regulatory approval to market esmethadone, psilocybin or other future product candidates, any such approval may be subject to limitations on the indicated uses or patient populations for which we may market the products.
This could have a material adverse effect on our business, results of operations, financial condition and prospects. If a supplier of an active pharmaceutical ingredient (API) or a pharmaceutical excipient fails to provide us sufficient quantities, we may not be able to obtain an alternative supply on a timely or acceptable basis.
If a supplier of an active pharmaceutical ingredient (API) or a pharmaceutical excipient fails to provide us sufficient quantities, we may not be able to obtain an alternative supply on a timely or acceptable basis. Our APIs and pharmaceutical excipients are multisource, although not all sources have an active Drug Master File (DMF) with the FDA.
We may not be able to obtain marketing exclusivity under the Hatch-Waxman Amendments or equivalent regulatory data exclusivity protection in other jurisdictions for our products. We intend to rely, in part, on Hatch-Waxman exclusivity for the commercialization of our products in the United States, if approved.
In addition, even if we intend to seek orphan drug designation for other product candidates or indications, we may never receive such designations or obtain orphan drug exclusivity. 20 We may not be able to obtain marketing exclusivity under the Hatch-Waxman Amendments or equivalent regulatory data exclusivity protection in other jurisdictions for our products.
Although our primary strategic interest is in the areas of depression, esmethadone has potential benefits in other therapeutic areas.
We may need to focus our future efforts in new therapeutic areas where we have little or no experience. Although our primary strategic interest is in the areas of depression, esmethadone has potential benefits in other therapeutic areas.
We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from future legislation or administrative action, either in the United States or abroad. 20 Fast Track Designation may not lead to a faster development or regulatory review or approval process. We have obtained Fast Track Designation for esmethadone for the adjunctive treatment of MDD.
Fast Track Designation may not lead to a faster development or regulatory review or approval process. We have obtained Fast Track Designation for esmethadone for the adjunctive treatment of MDD.
The FDA’s policies may change and additional government regulations may be enacted that could prevent or delay regulatory approval of our drug candidates.
The FDA’s policies may change and additional government regulations may be enacted that could prevent or delay regulatory approval of our drug candidates. We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
Orphan drug designation by the FDA neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. In addition, even if we intend to seek orphan drug designation for other product candidates or indications, we may never receive such designations or obtain orphan drug exclusivity.
Orphan drug designation by the FDA neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
Depending on the extent of the REMS requirements, our costs to commercialize our products may increase significantly. Furthermore, controlled substances risks that are not adequately addressed through proposed REMS for our product candidates may also prevent or delay their approval for commercialization.
Furthermore, controlled substances risks that are not adequately addressed through proposed REMS for our product candidates may also prevent or delay their approval for commercialization. Our products will face significant competition in the markets for such products, and if they are unable to compete successfully, our business will suffer.
We compete in an industry that is characterized by: (i) rapid technological change, (ii) evolving industry standards, (iii) emerging competition and (iv) new product introductions. Our competitors have existing products and technologies that will compete with our products and technologies and may develop and commercialize additional products and technologies that will compete with our products and technologies.
Our products candidates face, and will continue to face, intense competition from large pharmaceutical companies, specialty pharmaceutical and biotechnology companies as well as academic and research institutions. We compete in an industry that is characterized by: (i) rapid technological change, (ii) evolving industry standards, (iii) emerging competition and (iv) new product introductions.
Our reliance on third parties that we do not control will not relieve us of these responsibilities and requirements. Any adverse development or delay in our preclinical studies or clinical trials as a result of our reliance on third parties could have a material and adverse effect on our business, financial condition, results of operations and prospects.
Any adverse development or delay in our preclinical studies or clinical trials as a result of our reliance on third parties could have a material and adverse effect on our business, financial condition, results of operations and prospects. 29 Risks Related to Ownership of Our Common Stock There is a limited market for our common stock that may make it more difficult to dispose of your stock.
This high degree of regulation can result in significant costs in order to comply with the required regulations, which may have an adverse effect on the development and commercialization of our product candidates. The DEA limits the availability and production of all scheduled substances, including esmethadone, through a quota system.
For example, all Schedule II drug prescriptions cannot be refilled and must contain a written or electronic signature of a practitioner when presented to a pharmacy. This high degree of regulation can result in significant costs in order to comply with the required regulations, which may have an adverse effect on the development and commercialization of our product candidates.
In addition, these opponents may seek to generate negative publicity in an effort to persuade the medical community to reject these products. Political pressures and adverse publicity could lead to delays in, and increased expenses for, and limit or restrict the introduction and marketing of our product candidates.
Opponents of these products may seek restrictions on marketing and withdrawal of any regulatory approvals. In addition, these opponents may seek to generate negative publicity in an effort to persuade the medical community to reject these products.
In addition, the law eliminates the “donut hole” under Medicare Part D beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost through a newly established manufacturer discount program. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
In addition, the law eliminates, beginning in 2025, the coverage gap under Medicare Part D by significantly lowering the beneficiary maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescriptions costs for brand drugs below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been reached.
Furthermore, the amount of Schedule II substances that can be obtained for clinical trials and commercial distribution is limited by the DEA through its quota system. Quotas may not be sufficient to complete clinical trials or meet commercial demand.
These product candidates are also subject to the CSA and DEA regulations relating to their handling (i.e., manufacturing, storage, distribution, prescribing and dispensing procedures). Furthermore, the amount of controlled substances that can be obtained for clinical trials and commercial distribution is limited by the DEA through its quota system.
Our expending additional resources on such trials would have an adverse effect on our operating results and financial condition. In jurisdictions outside the United States, we or our collaborators must receive marketing authorizations from the appropriate regulatory authorities before commercializing our drugs.
In jurisdictions outside the United States, we or our collaborators must receive marketing authorizations from the appropriate regulatory authorities before commercializing our drugs. Regulatory approval processes outside the United States generally include all of the aforementioned requirements and risks associated with FDA approval.
If FDA were to determine that we do not meet the requirements to make the election, we may not be able to obtain 5-year exclusivity for the product. In addition, under the statute, this election currently may only be made in an NDA submitted before October 1, 2027.
For esmethadone, which we intend to elect to have not be considered the same active ingredient as methadone and therefore an NCE, we anticipate obtaining 5-year exclusivity. If FDA were to determine that we do not meet the requirements to make the election, we may not be able to obtain 5-year exclusivity for the product.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−1 removed2 unchanged
Biggest changeFor 2022, the lease agreement was renewed at an average monthly rent rate of approximately $9,000. For 2023, the lease agreement was renewed at an average monthly rent rate of approximately $7,000.
Biggest changeUnder the 2021 lease agreement the average monthly rent expense was approximately $11,000. For 2022, 2023 and 2024, the renewed lease agreement was for an average monthly rent expense of approximately $9,000, $7,000 and $7,000, respectively. On June 8, 2017, the Company entered into an Amended and Restated License Agreement (the Actinium License) with Actinium Pharmaceuticals, Inc.
ITEM 2. PROPERTIES We do not own any property. On August 1, 2021, the Company changed its corporate headquarters to 2222 Ponce de Leon Blvd., Floor 3, Coral Gables, Florida 33134. Pursuant to a lease agreement, dated August 1, 2021, and renewed in 2022 and 2023, the Company leased the space for a total average monthly cost of $11,000.
ITEM 2. PROPERTIES We do not own any property. The Company’s corporate headquarters are located at 2222 Ponce de Leon Blvd., Floor 3, Coral Gables, Florida 33134. Pursuant to a lease agreement, dated August 1, 2021, and renewed in 2022, 2023 and 2024, the Company leased office space at 2222 Ponce de Leon Blvd, Floor 3, Coral Gables, FL 33134.
Beginning on January 1, 2023, we also leased office space at 880 Third Avenue, 12 th Floor, New York, NY 10022 for approximately $15,000 per month, that expires on December 31, 2023.
Beginning on January 1, 2023, the Company also leased office space at 880 Third Avenue, 12 th Floor, New York, NY 10022 for approximately $15,000 per month, this lease was terminated on November 30, 2023.
Removed
Effective July 31, 2021, the Company terminated its prior lease agreement, dated January 1, 2021 for space at 880 Third Avenue, 12 th Floor, New York, NY 10022, its former corporate headquarters. On June 8, 2017, the Company entered into an Amended and Restated License Agreement (the Actinium License) with Actinium Pharmaceuticals, Inc.
Added
Beginning on December 1, 2023, the Company leased office space at 12 E 49 th Street, New York, NY 10022 for approximately $12,000 per month, that expires on July 31, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−0 removed6 unchanged
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Relmada has a 2014 Option and Equity Incentive Plan, as amended (the Plan) in which its directors, officers, employees and consultants shall be eligible to participate. The Plan allows for the granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase shares of the Company.
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Relmada has a 2014 Option and Equity Incentive Plan, as amended (the 2014 Plan) in which its directors, officers, employees and consultants shall be eligible to participate.
At the annual shareholders meeting (currently anticipated for May 25, 2023), our shareholders will vote on a management proposal to increase the shares authorized for awards under the 2021 Plan by 2,500,000 shares but there can be no assurance such amendment will be approved.
At the annual shareholders meeting (currently anticipated for May 24, 2024), our shareholders will vote on a management proposal to increase the shares authorized for awards under the 2021 Plan by an additional 4,500,000 shares, but there can be no assurance such amendment will be approved.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on Nasdaq Global Select Market, under the symbol “RLMD”. Holders As of March 20, 2023, 30,099,203 shares of common stock were issued and outstanding, which were held by 136 holders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on Nasdaq Global Select Market, under the symbol “RLMD”. Holders As of March 15, 2024, 30,174,202shares of common stock were issued and outstanding, which were held by 129 holders of record.
The following table summarizes our equity compensation plan information as of December 31, 2022: Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options and stock appreciation rights Weighted- average exercise price of outstanding options and stock appreciation rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 12,122,606 $ 18.19 930,336 Equity compensation plans not approved by security holders - - - Total 12,122,606 $ 18.19 930,336
The following table summarizes our equity compensation plan information as of December 31, 2023: Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options and stock appreciation rights Weighted- average exercise price of outstanding options and stock appreciation rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders (1) 17,416,192 $ 12.99 136,750 Equity compensation plans not approved by security holders - - - Total 17,416,192 $ 12.99 136,750 (1) The 2021 Equity Incentive Plan, as amended. 35
With these grants and approvals, as of December 31, 2022, the Company had 930,336 awards available to be issued.
With these grants and approvals, as of December 31, 2023, the Company had 136,750 shares available to be issued pursuant to awards under the 2021 Plan.
Added
The 2014 Plan allows for the granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase shares of the Company.
Added
At the annual shareholders meeting on May 25, 2023, our shareholders approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available for issuance thereunder by 2,500,000 shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

24 edited+6 added−7 removed15 unchanged
Biggest changeThe increase in research and development expense was primarily due to: ● Increase in other research expenses of $19,073,100 primarily associated with additional consultants contracted to assist in the execution of our Phase 3 trials; ● Increase in study costs of $14,689,700 associated with the execution of three Phase 3 trials and one open label extension safety study; ● Increase in pre-clinical and toxicology expenses of $225,500; ● Decrease in stock-based compensation expense of $7,953,200 primarily related to warrants issued for a license agreement to Arbormentis, LLC in 2021 for $10,241,600; ● Decrease in manufacturing and drug storage costs of $3,213,900 related to materials needed to complete the Phase 3 program; and ● Decrease in compensation expense of $119,800 due to lower employee-related costs.
Biggest changeThe decrease in research and development expense was primarily due to: ● Decrease in study costs of $45,506,500 associated with the completion execution of two Phase 3 trials and the long-term, open-label, safety study (Study 310); ● Decrease in other research expenses of $12,919,100 primarily associated with additional consultants contracted to assist in the execution of our Phase 3 trials; ● Decrease in manufacturing and drug storage costs of $924,800 related to materials needed to complete the Phase 3 program; ● Decrease in stock-based compensation expense of $658,700; ● Decrease in pre-clinical and toxicology expenses of $131,000; and ● Increase in compensation expense of $1,624,500 due to higher employee-related costs.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information and financial data discussed below is derived from the consolidated financial statements of Relmada for the years ended December 31, 2022 and 2021. The consolidated financial statements of Relmada were prepared and presented in accordance with generally accepted accounting principles in the United States.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information and financial data discussed below is derived from the consolidated financial statements of Relmada for the years ended December 31, 2023 and 2022. The consolidated financial statements of Relmada were prepared and presented in accordance with generally accepted accounting principles in the United States.
Management believes that due to the recent equity raises completed and exercises of options and warrants and the resulting cash position on its balance sheet, it has obtained sufficient funding, based on its budgeted cash flow requirements, to continue ongoing operations for at least 12 months from the filing of this annual report.
Management believes that due to previous equity raises completed and exercises of options and warrants and the resulting cash position on its balance sheet, it has sufficient funding, based on its budgeted cash flow requirements, to continue ongoing operations for at least 12 months from the filing of this annual report.
Income Taxes The Company did not provide for income taxes for the years ended December 31, 2022 and 2021, since there was a loss and a full valuation allowance against all deferred tax assets.
Income Taxes The Company did not provide for income taxes for the years ended December 31, 2023 and 2022, since there was a loss and a full valuation allowance against all deferred tax assets.
The FDA also confirmed that Relmada does not need to conduct a TQT cardiac study in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data already provided and the data to be generated by the Phase 3 program will be adequate to evaluate the cardiac safety profile of REL-1017.
The FDA also confirmed that Relmada would not need to conduct a TQT cardiac study in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data already provided and the data to be generated by the Phase 3 program would be adequate to evaluate the cardiac safety profile of REL-1017.
On October 13, 2022, Relmada announced that its RELIANCE III study, evaluating REL-1017 in the monotherapy setting for MDD, did not achieve its primary endpoint, which was a statistically significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.
On October 13, 2022, Relmada announced that the RELIANCE III study, evaluating REL-1017 in the monotherapy setting for MDD, did not achieve its primary endpoint, which was a statistically significant improvement in depression symptoms compared to placebo as measured by the Montgomery-Asberg Depression Rating Scale (MADRS) on Day 28.
Recent Accounting Pronouncements The Company lists material recent accounting pronouncements in Note 2 of the consolidated financial statements. 37
Recent Accounting Pronouncements The Company lists material recent accounting pronouncements in Note 2 of the consolidated financial statements. 39
Net cash provided by financing activities for the year ended December 31, 2022, was $45,020,474 due to proceeds from issuance of common stock of $42,728,599, proceeds from warrants exercised for common stock of $1,264,523, proceeds from options exercised for common stock of $703,720, proceeds from 16b short swing profit of $373,632 offset by the payment of fees for warrants issued for common stock of $50,000.
Net cash provided by financing activities for the year ended December 31, 2022, was $45,020,474 due to proceeds from issuance of common stock of $42,728,599, proceeds from warrants exercised for common stock of $1,264,523, proceeds from options exercised for common stock of $703,720, proceeds from Section 16b short swing profit of $373,632 offset by the payment of fees for warrants issued for common stock of $50,000. 38 Effects of Inflation Our assets are primarily monetary, consisting of cash and cash equivalents.
On April 1, 2021, Relmada announced the initiation of RELIANCE II, the second of two sister pivotal Phase 3 clinical trials (RELIANCE I and RELIANCE II) of REL-1017, as an adjunctive treatment for MDD.
On April 1, 2021, Relmada announced the initiation of RELIANCE II, the second of two sister pivotal Phase 3 clinical trials (RELIANCE I and RELIANCE II) of REL-1017, as an adjunctive treatment for MDD. On October 4, 2021, Relmada announced the initiation of the RELIANCE III study, the monotherapy trial for the Company’s lead product candidate, REL-1017.
This was offset by non-cash expenses which primarily consisted of stock-based compensation of $44,194,765 and a gain on settlement of $6,351,606. There were realized and unrealized losses on short term investments of $585,522 and $4,220,255, respectively. In addition, there were increases in operating assets and liabilities for the year ended December 31, 2022 of $10,593,270.
For the year ended December 31, 2022, cash used in operating activities was $103,801,617 primarily due to the net loss of $157,043,823. This was offset by non-cash expenses which primarily consisted of stock-based compensation of $44,194,765 and a gain on settlement of $6,351,606. There were realized and unrealized losses on short term investments of $585,522 and $4,220,255, respectively.
General and Administrative Expense Total general and administrative expense for the year ended December 31, 2022 was approximately $47,926,100, as compared to $35,081,900 for the same period of 2021, an increase of $12,844,200.
General and Administrative Expense Total general and administrative expense for the year ended December 31, 2023 was approximately $48,894,900, as compared to $47,926,100 for the same period of 2022, an increase of $968,800.
Net Loss The Company recorded a net loss of approximately $157,043,800 and $125,751,800 or $5.30 and $7.16 per common share, basic and diluted, during the years ended December 31, 2022 and 2021, respectively, based on the factors described above. 35 Liquidity As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $103,801,617 for the year ended December 31, 2022 and has an accumulated deficit of $462,110,935 from inception through December 31, 2022.
Net Loss The Company recorded a net loss of approximately $98,791,700 and $157,043,800 or $3.28 and $5.30 per common share, basic and diluted, during the years ended December 31, 2023 and 2022, respectively, based on the factors described above. 37 Liquidity As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $51,659,206 for the year ended December 31, 2023 and has an accumulated deficit of $560,902,681 from inception through December 31, 2023.
We have not generated revenues and do not anticipate generating revenues for the foreseeable future. We had a net loss of approximately $157,043,800 and $125,751,800 for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022, we have an accumulated deficit of approximately $462,110,900.
We have not generated revenues and do not anticipate generating revenues for the foreseeable future. We had a net loss of approximately $98,791,700 and $157,043,800 for the years ended December 31, 2023 and 2022, respectively.
Other Income, Net Gain on settlement fees was approximately $6,351,600 received from a settlement during 2022. Interest/investment income was approximately $2,659,400 for the year ended December 31, 2022 compared to approximately $1,199,100 for the same period of 2021, an increase of $1,460,300. The increase was primarily related to a lower average investment balance during 2021 as compared to 2022.
Other Income, Net Gain on settlement fees was approximately $6,351,600 received from a settlement during 2022. There was no gain on settlement of fees during 2023. Interest/investment income was approximately $5,151,700 for the year ended December 31, 2023 compared to approximately $2,659,400 for the same period of 2022, an increase of $2,492,300.
On December 7, 2022, Relmada announced that its RELIANCE I study, evaluating REL-1017 as an adjunctive treatment for MDD, did not achieve its primary endpoint, which was a statistically significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.
On December 7, 2022, Relmada announced that the RELIANCE I, evaluating REL-1017 as an adjunctive treatment for MDD, did not achieve its primary endpoint, which was a statistically significant improvement in depression symptoms compared to placebo as measured by the Montgomery-Asberg Depression Rating Scale (MADRS) on Day 28 Patients who completed the RELIANCE trials were eligible to rollover into a long-term, open-label study (Study 310), which also included subjects who had not previously participated in a REL-1017 clinical trial.
The increase in general and administrative expenses was primarily due to: ● Increase in stock-based compensation expense of $11,653,600 primarily related to options granted to employees and the board of directors during 2021; ● Increase in other general and administrative expenses of $1,762,100 due to increases in professional fees and consulting expenses during 2022; and ● Decrease in compensation expense of $571,500 due to lower employee-related costs.
The increase in general and administrative expenses was primarily due to: ● Increase in compensation expense of $2,242,000 due to higher employee-related costs; ● Increase in stock-based compensation expense of $275,000 primarily related to options granted to employees and the board of directors during 2023; and ● Decrease in other general and administrative expenses of $1,548,200 due to decreases in professional fees and consulting expenses during 2023.
The following table sets forth selected cash flow information for the periods indicated below: For the Year Ended For the Year Ended December 31, December 31, 2022 2021 Cash used in operating activities $ (103,801,617 ) $ (91,873,395 ) Cash provided by (used in) investing activities 19,733,609 (54,118,036 ) Cash provided by financing activities 45,020,474 187,939,473 Net increase/(decrease) in cash and cash equivalents $ (39,047,534 ) $ 41,948,042 For the year ended December 31, 2022, cash used in operating activities was $103,801,617 primarily due to the net loss of $157,043,823.
The following table sets forth selected cash flow information for the periods indicated below: For the Year Ended For the Year Ended December 31, December 31, 2023 2022 Cash used in operating activities $ (51,659,206 ) $ (103,801,617 ) Cash provided by investing activities 50,453,332 19,733,609 Cash provided by (used in) financing activities (98,463 ) 45,020,474 Net decrease in cash and cash equivalents $ (1,304,337 ) $ (39,047,534 ) For the year ended December 31, 2023, cash used in operating activities was $51,659,206 primarily due to the net loss of $98,791,746.
In addition, there were increases in operating assets and liabilities for the year ended December 31, 2021 of $7,864,714. For the year ended December 31, 2022, cash provided by investing activities was $19,733,609, due to $47,293,763 of purchases of short term investments offset by $67,027,372 of sales of short term investments.
For the year ended December 31, 2022, cash provided by investing activities was $19,733,609, due to $47,293,763 of purchases of short term investments offset by $67,027,372 of sales of short term investments. Net cash used in financing activities for the year ended December 31, 2023, was $98,463 due to ATM reactivation fees.
Unrealized loss on short-term investments was approximately $4,220,300 compared to approximately $611,400 for the same period of 2021, an increase of $3,608,900. The increase was related to the market conditions.
The increase was related to the timing of the sales of short-term investments along with market conditions. Unrealized gain on short-term investments was approximately $3,823,200 compared to an unrealized loss of approximately $4,220,300 for the same period of 2022, an increase of $8,043,500. The increase was related to the market conditions.
However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate at which we use our resources.
However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate at which we use our resources. Lease Obligations The Company is obligated to pay approximately $171,800 under 2 leases for office space over the next year.
Results of Operations For the Year Ended December 31, 2022 vs the Year Ended December 31, 2021 Research and Development Expense Total research and development expense for the year ended December 31, 2022 was approximately $113,323,000, as compared to $90,621,600 for the same period of 2021, an increase of $22,701,400.
At December 31, 2023, we have an accumulated deficit of approximately $560,902,700. 36 Results of Operations For the Year Ended December 31, 2023 vs the Year Ended December 31, 2022 Research and Development Expense Total research and development expense for the year ended December 31, 2023 was approximately $54,807,400, as compared to $113,323,000 for the same period of 2022, a decrease of $58,515,600.
In the study, the REL-1017 treatment arm (n= 113) showed a MADRS reduction of 15.1 points at Day 28 versus 12.9 points for the placebo arm (n=114), which is a clinically meaningful difference of 2.2 points on the MADRS, as well as a statistically significant difference in the response rate, with a response rate of 27.2% on placebo vs 39.8% in the REL1017 arm (p 34 In addition, in order to support potential regulatory submissions seeking approval for REL-1017 as adjunctive and monotherapy treatment, the FDA confirmed that, based on what is known at this time, Relmada will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data have been generated to date.
In addition, on October 4, 2021, Relmada announced that in order to support potential regulatory submissions seeking approval for REL-1017 as adjunctive and monotherapy treatment, the FDA confirmed that, based on what was known at the time, Relmada would not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data had been generated to date.
For the year ended December 31, 2021, cash used in operating activities was $91,873,395 primarily due to the net loss of $125,751,809. This was offset by non-cash expenses which primarily consisted of stock-based compensation of $40,494,476 and depreciation expense of $1,258. There were realized and unrealized losses on short term investments of $636,012 and $611,382, respectively.
This was offset by non-cash expenses which primarily consisted of stock-based compensation of $43,811,149. There were realized losses and unrealized gains on short term investments of $4,064,391 and $3,823,234, respectively. In addition, there were increases in operating assets and liabilities for the year ended December 31, 2023 of $3,080,234.
For the year ended December 31, 2021, cash used in investing activities was $54,118,036, due to $222,981,675 of purchases of short term investments offset by $168,863,639 of sales of short term investments.
In addition, there were increases in operating assets and liabilities for the year ended December 31, 2022 of $10,593,270. For the year ended December 31, 2023, cash provided by investing activities was $50,453,332, due to $90,463,532 of purchases of short term investments offset by $140,916,864 of sales of short term investments.
Removed
Patients who complete RELIANCE I and RELIANCE II are eligible to rollover into the long-term, open-label study, which also includes subjects who had not previously participated in a REL-1017 clinical trial. On October 4, 2021, Relmada announced the initiation of the RELIANCE III study, the monotherapy trial for the Company’s lead product candidate, REL-1017.
Added
This rollover study completed subject visits on July 11, 2023. On August 23, 2023, Relmada announced the dosing of the first patient in RELIGHT, a Phase 3 clinical trial for REL-1017, as an adjunctive treatment for MDD.
Removed
On August 9, 2022, Relmada announced that the FDA granted Fast Track designation to REL-1017 as a monotherapy for the treatment of MDD.
Added
On September 20, 2023, Relmada announced efficacy results for the de novo (or new to treatment) patients (204 patients) and safety results for all subjects (627 patients) from the Phase 3, long-term, open-label, safety trial (Study 310) of REL-1017 in patients with Major Depressive Disorder (MDD).
Removed
In the study, the REL-1017 treatment arm showed a MADRS reduction of 14.8 points at Day 28 versus 13.9 points for the placebo arm, a higher than expected placebo response.
Added
Patients treated daily with REL-1017 for up to one year experienced rapid, clinically meaningful, and sustained improvements in depressive symptoms and associated functional impairment. REL-1017 was well-tolerated with long-term dosing, showing low rates of adverse events and discontinuations due to adverse events. No new safety signals were detected.
Removed
Realized loss on short-term investments was approximately $585,500 compared to approximately $636,000 for the same period of 2021, a decrease of $50,500. The decrease was related to the timing of the sales of short-term investments along with market conditions.
Added
The increase was primarily related to higher returns from higher interest rates, offset by lower average investment balance during 2023 as compared to 2022. Realized loss on short-term investments was approximately $4,064,400 compared to approximately $585,500 for the same period of 2022, an increase of $3,478,900.
Removed
Relmada has funded its past operations through equity raises and most recently in the year ended December 31, 2022, Relmada raised $42,728,599 in net proceeds from the sale of common stock, $1,264,523 through the exercise of warrants, and $703,720 through the exercise of options.
Added
Relmada has funded its past operations through equity raises and warrant and stock option exercises.
Removed
Net cash provided by financing activities for the year ended December 31, 2021, was $187,939,473 due to proceeds from issuance of common stock of $184,642,981, proceeds from warrants exercised for common stock of $2,628,061, proceeds from options exercised for common stock of $668,431. Effects of Inflation Our assets are primarily monetary, consisting of cash and cash equivalents.
Added
Seasonality We do not have a seasonal business cycle.
Removed
Lease Obligations The Company is obligated to pay approximately $274,000 under 2 office operative leases over the next year. 36 Seasonality We do not have a seasonal business cycle.