UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2024
☐ TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 000-55347
Relmada Therapeutics, Inc.
(Exact name of registrant as specified in its
charter)
2222 Ponce de Leon Blvd., Floor 3
Coral Gables, FL33134
(Address of principal executive offices) (Zip
Code)
(786)629 1376
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ($.001 par value) RLMD The NASDAQ Global Select Market
Securities registered pursuant to section 12(g)
of the Act:
None
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by checkmark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒
No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2024 (the last business day of
the registrant’s most recently completed second fiscal quarter), the aggregate market value of the registrant’s common stock
held by non-affiliates of the registrant was $89,007,030, based on the closing price on that date as reported on the NASDAQ.
As
of March 25, 2025, there were 33,191,622 shares of common stock, $0.001 par value per share, outstanding.
Documents Incorporated by Reference
Portions of the registrant’s definitive
proxy statement for its 2025 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the registrant’s
fiscal year ended December 31, 2024, are incorporated by reference in Part III of this Annual Report on Form 10-K. Except with respect
to information specifically incorporated by reference in this Annual Report on Form 10-K, the Proxy Statement is not deemed to be filed
as part of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Item Number and Caption Page
Forward-Looking Statements ii
PART I 1
1. Business 1
1A. Risk Factors 16
1B. Unresolved Staff Comments 38
1C. Cybersecurity 38
2. Properties 39
3. Legal Proceedings 39
4. Mine Safety Disclosures 39
6. [Reserved] 41
7A. Quantitative and Qualitative Disclosures About Market Risk 43
8. Financial Statements and Supplementary Data 46
9A. Controls and Procedures 46
9B. Other Information 47
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 47
PART III 48
10. Directors, Executive Officers, and Corporate Governance 48
11. Executive Compensation 48
13. Certain Relationships and Related Transactions, and Director Independence 48
14. Principal Accountant Fees and Services 48
15. Exhibits and Financial Statement Schedules 49
Signatures 56
i
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual
Report”) contains forward looking statements that involve risks and uncertainties, principally in the sections entitled “Description
of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.” All statements other than statements of historical fact contained in this Report, including statements regarding
future events, our future financial performance, business strategy and plans and objectives of management for future operations, are
forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,”
“believes,” “can,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “should,”
or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements
unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions
and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or
elsewhere in this Report, which may cause our or our industry’s actual results, levels of activity, performance or achievements
to differ materially from those expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive
and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can
we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual
results to differ materially from those contained in any forward-looking statements. All forward-looking statements included in this
document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking
statements.
You should not place undue reliance on any forward-looking
statement, each of which applies only as of the date of this Annual Report. Before you invest in our securities, you should be aware
that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Annual Report could
negatively affect our business, operating results, financial condition and stock price. Except as required by law, we undertake no obligation
to update or revise publicly any of the forward-looking statements after the date of this Annual Report on Form-10-K to conform our statements
to actual results or changed expectations.
ii
PART I
All brand names or trademarks appearing in
this report are the property of their respective holders. Unless the context requires otherwise, references in this report to “Relmada,”
the “Company,” “we,” “us,” and “our” refer to Relmada Therapeutics, Inc., a Nevada corporation.
ITEM 1. BUSINESS
Business Overview
Relmada Therapeutics, Inc. (Relmada, the
Company, we or us) (a Nevada corporation), is a publicly traded, clinical-stage biotechnology company. We substantially redesigned
our development programs following a comprehensive strategic review occasioned by disappointing interim analysis results in December
2024 indicating that our then lead development candidate, esmethadone (d-methadone, dextromethadone, or REL-1017) for the adjunctive
treatment of Major Depressive Disorder (MDD), was unlikely to succeed in its pivotal trial. We concluded in our review that the most
promising path to create shareholder value was to lever our extensive drug development expertise and clinical operations
capabilities by acquiring new development candidates, while pausing further work on REL-1017. Hence we accelerated ongoing efforts
to augment our development pipeline while diversifying its risk, which culminated in the recently announced licensing of NDV-01, a
novel delivery formulation of a widely used chemotheraphy regimen used to treat non muscle-invasive bladder cancer (NMIBC) that is
currently in Phase 2, and the acquisition of Sepranolone, a Phase 2b-ready neurosteroid with potential applications in Prader-Willi
syndrome (PWS), Tourette Syndrome (TS), essential tremor and other diseases related to excessive GABAergic activity.
We also had been developing REL-P11, a modified-release
formulation of psilocybin, as an investigational agent for the treatment of metabolic disease. The REL-P11 program has successfully completed
a Phase 1 safety study. However, in light of an ongoing strategic review of this business opportunity, the changing regulatory landscape
for psychedelics, its early stage of development and the acquisition of new, more advanced product candidates, this program has also
been paused.
REL-1017 Program Updates
Since 2013, we had been developing esmethadone
as our lead product candidate as an oral agent for the treatment of depression and other potential indications. In December 2024,
we reported that the pre-planned interim analysis, conducted by the Independent Data Monitoring Committee (DMC), of Reliance II, our Phase
3 study of esmethadone as a potential adjunctive treatment for MDD, indicated that the study was futile and unlikely to meet the primary
efficacy endpoint with statistical significance, and that we would pause the Reliance II and Relight Phase 3 studies of esmethadone.
Following this 2024 REL-1017 setback, which we
believe mostly likely resulted from an overwhelming placebo response—a trend that has become more common than exceptional in central
nervous system (CNS) clinical trials—the program has been paused pending a comprehensive data review, after which we will make a
decision regarding the future of this program.
Strategic Business Review and New Approach
Following a comprehensive evaluation of the Company’s
business strategy and growth opportunities, management and the Board of Directors have implemented a revised approach aimed at maximizing
shareholder value. This refined strategy remains focused on:
● Innovation – Advancing novel and differentiated therapeutic solutions
Key Strategic Priorities
Under this updated approach, we will continue
to emphasize:
This strategic framework positions the Company for long-term
growth while maintaining execution and financial prudence.
1
Progress in Strategic Execution
We commenced a strategic review in December 2024
of our then existing development pipeline and the opportunities open to us given our core strengths in every aspect of drug development,
with particular expertise in CNS. That process recently resulted in a series of transactions that have considerably expanded and strengthened
Relmada’s potential to create shareholder value. Over the past three months, we have successfully closed two important transactions,
NDV-01 in-licensing and Sepranolone acquisition, which align with our new strategy.
On February 6, 2025, Relmada announced the acquisition
from Asarina Pharma AB (Asarina) of Sepranolone, a Phase 2b ready neurosteroid being developed for the potential treatment of PWS, TS,
essential tremor and other diseases related to the excessive GABAergic activity.
On March 25, 2025, Relmada announced the in-license
agreement from Trigone Pharma Ltd. (Trigone) of NDV-01, a novel delivery formulation of a widely used chemotherapeutic regimen used to
treat NMIBC.
Key Upcoming Anticipated Milestones
We expect multiple key milestones over the next
12 months. These include:
● NDV-01 United States Investigative New Drug clearance – 2nd Half 2025
● Sepranolone – Initiation of clinical trial in PWS – Year-end 2025
Our Development Programs
Sepranolone Program
The GABAergic system is the primary inhibitory
neurotransmitter pathway. It consists of two types of receptors, GABAA and GABAB. GABAA receptors are a major target
for neuropsychiatric drugs, including benzodiazepines, barbituates and anesthetic agents. The GABAergic system regulates a host of physiological
and neurological functions and their related moods and behaviors. The principal positive physiologic modulators of the GABAergic system
are the neurotransmitter GABA (γ-aminobutyric acid) and the positive allosteric modulator Allopregnaolone. GABA generally inhibits
nervous system excitability and thereby produces a calming effect that reduces anxiety and compulsive behavior, among other manifestations.
While Allopregnanolone typically enhances GABA’s calming effects, in some individuals it paradoxically exacerbates anxiety and compulsive
behavior.
Sepranolone is a synthetic version of Isoallopregnanolone,
a naturally occurring neurosteroid that counteracts the effects of Allopregnanolone. Sepranolone is designed to normalize GABAA receptor
activity by targeting two specific receptor subtypes (alpha-2 and alpha-4) without directly interfering with GABA signaling, making it
a novel and selective treatment approach for diseases such as PWS and TS and other disorders that feature compulsive behavior.
Data from an open-label Phase 2a randomized study
demonstrated that Sepranolone has the potential to improve TS symptoms versus standard of care alone, as measured by changes in the YGTSS
scoring system (the world-standard Yale Global Tic Severity Scale) compared to baseline. In the 12-week, dual-center, parallel-group
study, 26 subjects were treated with Sepranolone (10 mg), administered by subcutaneous injection twice weekly in addition to standard
of care (SOC) versus standard of care alone.
The Phase 2a results showed competitive tic reduction
and improved quality of life while displaying no CNS off-target effects. Sepranolone not only reduced tic severity in its primary clinical
endpoint as measured by YGTSS by 28% (p=0.051) – but also achieved positive results in four key secondary endpoints compared with
standard of care:
● 50% greater reduction in impairment (YGTSS)
Importantly, no off-target CNS effects or systemic
side effects were observed in this study. Further, Sepranolone has been evaluated in multiple clinical neuro/hormonal studies involving
over 335 participants and has demonstrated a favorable safety profile.
Relmada is currently evaluating the nonclinical
and clinical strategy for the development of Sepranolone.
2
NDV-01 Program
The second program we recently in-licensed, NDV-01,
is a novel intravesicular delivery technology designed for the long-acting, controlled release of gemcitabine and docetaxel. This combination
therapy has gained significant interest as an alternative to Bacillus Calmette-Guérin (BCG) for treating NMIBC, especially given
the global BCG shortage since 2019. Clinical studies have shown that gemcitabine and docetaxel achieve response rates and Recurrence-Free
Survival comparable to or better than BCG. However, conventional administration is cumbersome, requiring sequential drug delivery over
three hours, with limited tumor exposure time.
NDV-01 potentially addresses these limitations
by enabling a single administration in approximately 10 minutes, delivering sustained, localized chemotherapy for up to 10 days. This
extended exposure enhances the therapeutic effect while improving patient convenience. NDV-01 is currently in a Phase 2 clinical trial
evaluating its safety and efficacy in patients with aggressive NMIBC.
NDV-01 is formulated as a controlled-release intravesical
therapy containing gemcitabine and docetaxel. By maintaining continuous drug exposure within the bladder, NDV-01 may optimize local efficacy
while minimizing systemic absorption and associated side effects. Unlike conventional intravesical instillations, which result in fluctuating
drug levels, NDV-01 provides a continuous release of both agents over 10 days. This sustained delivery may improve cancer cell eradication
and reduce recurrence risk while lowering the frequency of administration.
Esmethadone (d-Methadone, dextromethadone, REL-1017) as a treatment
for MDD
Esmethadone’s mechanism of action, as a
low affinity, non-competitive NMDA channel blocker or antagonist, is fundamentally differentiated from most currently FDA-approved antidepressants,
as well as all atypical antipsychotics used adjunctively with standard, FDA-approved antidepressants. Working through the same brain
mechanisms as ketamine and esketamine but potentially lacking their adverse side effects, esmethadone is being developed as a rapidly
acting, oral agent for the treatment of depression and potentially other CNS conditions.
Relmada has paused this program pending a comprehensive data review,
after which a decision regarding the future of this program will be made.
Esmethadone (d-methadone, dextromethadone, REL-1017) in other indications
While our strategy was to focus on the development of esmethadone as
an adjunctive treatment for MDD, we are also evaluating other indications that Relmada may explore in the future, including restless leg
syndrome and other glutamatergic system activation related diseases.
3
Psilocybin Program
Relmada acquired the development and commercial
rights to a novel psilocybin and derivative program from Arbormentis LLC in July of 2021. The original focus of the program was limited
to neurodegenerative diseases. Psilocybin has neuroplastogenTM effects that have the potential to ameliorate the consequences of
multiple neurodegenerative conditions. The pleiotropic metabolic effects of low-dose psilocybin were discovered while studying its neuroplastogenTM
potential in a rodent model deficient in neurogenesis – obese rodents maintained on a high fructose, high fat diet (HFHFD). 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.
Relmada has paused this program in light of an
ongoing strategic review of this business opportunity, the changing regulatory landscape for psychedelics, its early stage of development
and the acquisition of new, more advanced product candidates.
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 cancer, neurological disorders, depression and other diseases.
Currently, none of our product candidates has been approved for sale
in the United States or elsewhere. We have no commercial products, nor do we have a sales or marketing infrastructure. In order to market
and sell our products we must conduct clinical trials on patients and obtain regulatory approvals from appropriate regulatory agencies,
like the FDA in the United States, and similar organizations elsewhere in the world.
We have not generated revenues and do not anticipate
generating revenues for the foreseeable future. We had net loss of approximately $79,979,400 and $98,791,700 for the years ended December
31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $640,882,000.
Business Strategy
Our strategy is to leverage our considerable
industry experience, understanding of pharmaceutical markets and development expertise to identify, develop and commercialize product
candidates with significant market potential that can fulfill unmet medical needs. We have assembled a management team along with both
scientific advisors and business advisors with significant industry and regulatory experience to lead and execute the development and
commercialization of our product candidates.
4
Intellectual Property Portfolio and Market Exclusivity
We have more than 40 issued patents and pending
patent applications related to Sepranolone for multiple uses, including diseases and disorders exhibiting compulsive behaviors such as
PWS, TS, obsessive-compulsive disorder, and gambling disorder, potentially providing coverage beyond 2030.
We have more than 10 issued patents and pending
patent applications related to NDV-01 for multiple uses, including formulations and methods for controlled release of therapeutics for
treatment of diseases such as bladder cancer, potentially providing coverage beyond 2038.
We have more than 50 issued patents and pending
patent applications related to REL-1017 for multiple uses, including psychological and neurological conditions, potentially providing
coverage beyond 2033. 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. 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. (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.
Esmethadone License Agreement
As a result of a prior acquisition, the Company
assumed an obligation to pay third parties (Dr. Charles E. Inturrisi and Dr. Paolo Manfredi – see below): (A) royalty payments up
to 2% on net sales of licensed products that are not sold by sublicensee and (B) on each and every sublicense earned royalty payment received
by licensee from its sublicensee on sales of license product by sublicensee, the higher of (i) 20% of the royalties received by licensee;
or (ii) up to 2% of net sales of sublicensee. The Company will also make milestone payments of up to $4 or $2 million, for the first commercial
sale of product in the field that has a single active pharmaceutical ingredient, and for the first commercial sale of product in the field
of product that has more than one active pharmaceutical ingredient, respectively. As of December 31, 2024, the Company has not generated
any revenue related to this license agreement.
Sepranolone Acquisition
On February 3, 2025, we entered into an Asset
Purchase Agreement with Asarina, a Swedish corporation, pursuant to which we purchased, subject to the terms and conditions set forth
therein, from Asarina all right, title, and interest in Sepranolone. The total purchase price was €3,000,000. The Company paid Asarina
$2,756,000 on February 5, 2025, which includes a credit of $250,000 for a previous payment made by the Company to Asarina pursuant to
an exclusivity agreement in October 2024.
We will only assume liabilities arising after
the effective date of the Purchase Agreement. All other liabilities, including those arising before the effective date of the Purchase
Agreement, taxes, employment-related liabilities, and those related to the negotiation and consummation of the Purchase Agreement, will
remain with Asarina.
NDV-01 In-License Agreement
On March 24, 2025, we entered into an Exclusive
License Agreement with Trigone, an Israeli company. The license agreement is for Trigone’s NDV-01 product, which is a novel, sustained-release,
intravesical gemcitabine/docetaxel, ready-for-use product candidate for the treatment of NMIBC. Under the terms of the agreement, the
Company made a $3,500,000 upfront payment on March 25, 2025, and issued 3,017,420 shares of common stock, which represent 10% of the Company’s
outstanding shares, for exclusive worldwide rights to NDV-01, excluding Israel, India and South Africa.
In addition, the Company will pay up to $200 million
in development, regulatory and sales milestones pending successful commercialization. The Company will also pay a royalty of 3% on any
net sales. Following the completion of the ongoing Phase 2 study, the Company will assume responsibility for NDV-01’s development,
manufacturing and commercialization.
5
Inturrisi / Manfredi
In January 2018, the Company 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). Pursuant
to the Agreements, Relmada assigned its existing rights, including patents and patent applications, to esmethadone in the context of
psychiatric use (the Existing Invention) to Licensor. Licensor then granted Relmada under the License Agreement a perpetual, worldwide,
and exclusive license to commercialize the Existing Invention and certain further inventions regarding esmethadone, in the context of
other indications such as those contemplated above. In consideration of the rights granted to Relmada under the License Agreement, Relmada
paid the Licensor an upfront, non-refundable license fee of $180,000. Additionally, Relmada will pay Licensor $45,000 every three months
until the earliest to occur of the following events: (i) the first commercial sale of a licensed product anywhere in the world, (ii)
the expiration or invalidation of the last to expire or be invalidated of the patent rights anywhere in the world, or (iii) the termination
of the License Agreement. Relmada will also pay Licensor tiered royalties with a maximum rate of 2%, decreasing to 1.75%, and 1.5% in
certain circumstances, on net sales of licensed products covered under the License Agreement. 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, 2024, no events have occurred, and the Company continues to pay Licensor $45,000
every three months.
The License Agreement includes standard termination
rights for Licensor in the event of our insolvency, challenge of the licensed patents and uncured material breach of our obligations
under the License Agreement. In addition, the License Agreement contains certain “Key Man” provisions such that Licensor
may terminate the License Agreement if we terminate the employment of our Chief Executive Officer, Dr Sergio Traversa, for any reason
other than for specified causes determined by a majority of our Board of Directors (including fraud, gross negligence, unauthorized use
of our confidential information, conduct including harassment or discrimination, breach of fiduciary duty or uncured material breach),
or if we (a) substantially modify Dr. Traversa’s job responsibilities or decision-making rights in connection with the development
and commercialization of esmethadone, (b) remove him from the role of Chief Executive Officer other than in connection with a permitted
change-of-control transaction, (c) materially reduce his compensation, or (d) assign or transfer our rights under the License Agreement
or the esmethadone intellectual property without Dr. Traversa’s consent, in each case (termination or the events in (a) through
(d)) during the period commencing on the effective date and ending on the later of five years from the original effective date of the
License Agreement or December 31, 2022. The December 2019 amendment to the License Agreement made certain clarifications to the nature
of a termination for Cause, including to clarify that termination due to Dr. Traversa’s death or disability does not give Licensor
the right to terminate the License Agreement. On December 27, 2022, the Licensor and the Company entered into a new amendment extending
the “Key Man” provision period until December 31, 2027. The License Agreement was not otherwise modified.
Psilocybin License Agreement
On July 16, 2021, the Company entered into a
License Agreement with Arbormentis, LLC, a privately held Delaware limited liability company, by which the Company acquired development
and commercial rights to a novel psilocybin and derivate program from Arbormentis, LLC, worldwide excluding the countries of Asia. The
Company will collaborate with Arbormentis, LLC on the development of new therapies targeting neurological and psychiatric disorders,
leveraging Arbormentis’ understanding of neuroplasticity, and focusing on this emerging new class of drugs targeting the neuroplastogen
mechanism of action. Under the terms of the License Agreement, the Company paid Arbormentis, LLC an up-front fee of $12.7 million, consisting
of a mix of cash and warrants to purchase the Company’s common stock, in addition to potential milestone payments totaling up to
approximately $160 million related to pre-specified development and commercialization milestones. Arbormentis, LLC is also eligible to
receive a low single digit percentage royalty on net sales of any commercialized therapy resulting from this agreement. The license agreement
is terminable by the Company but is perpetual and not terminable by the licensor absent material breach of its terms by us.
Key Strengths
We believe that the key elements for our market success include:
● Compelling lead product opportunities in NDV-01 and Sepranolone
● Experienced management team with considerable drug development expertise
● Multiple potential bladder cancer related indications for NDV-01
● Substantial and growing IP portfolio for both Sepranolone and NDV-01
6
Competition
The pharmaceutical and biotechnology industry
is characterized by intense competition, rapid product development and technological change. Competition is intense among manufacturers
of prescription pharmaceuticals and other product areas where we may develop and market products in the future. Most of our competitors
are large, well-established pharmaceutical or healthcare companies with considerably more financial, marketing, sales and technical resources
than are available to us. Additionally, many of our competitors have research and development capabilities that may allow such competitors
to develop new or improved products that may compete with our products. Our products could be rendered obsolete or made uneconomical
by the development of new products.
Regarding our competitive position in the industry,
we currently have no products approved for sale.
Government Regulation
Government authorities in the United States,
at the federal, state and local level, and in other countries and jurisdictions extensively regulate, among other things, the research,
development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution,
marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory
approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes
and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
FDA Approval Process
In the United States, pharmaceutical products
are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act (FD&C Act) and other federal and state statutes
and regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling,
promotion and marketing, distribution, post-approval monitoring and reporting, sampling and import and export of pharmaceutical products.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such
as FDA refusal to approve pending NDAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of
production or distribution, injunctions, fines, civil penalties and criminal prosecution.
Pharmaceutical product development for a new
product or certain changes to an approved product in the U.S. typically involves nonclinical laboratory and animal tests, the submission
to FDA of an investigational new drug application (IND) which must become effective before clinical testing may commence, and adequate
and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval
is sought. 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.
Nonclinical 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 conduct of the nonclinical tests must comply with federal regulations and requirements, including good laboratory
practices. The results of nonclinical testing are submitted to FDA as part of an IND along with other information, including information
about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long-term nonclinical tests, such as animal
tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted. A 30-day waiting period after the submission
of each IND is required prior to the commencement of clinical testing in humans. During this period, if FDA concludes that a deficiency
exists in a clinical investigation that may be grounds for the imposition of clinical hold, FDA will usually attempt to discuss and satisfactorily
resolve the matter with the IND applicant. If such resolution is not possible, FDA may issue a clinical hold order by telephone or other
means of rapid communication or in writing. No more than 30 days after imposition of the clinical hold, a written explanation of the
basis for the hold will be issued by FDA and sent to the applicant. The applicant must respond in writing to each deficiency before the
clinical hold can be lifted. If FDA has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed
in the IND may begin. Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under
the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance
with good clinical practice, or GCP, an international standard meant to protect the rights and health of patients and to define the roles
of clinical trial sponsors, administrators and monitors; as well as (iii) under protocols detailing the objectives of the trial, the
parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients
and subsequent protocol amendments must be submitted to FDA as part of the IND.
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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. The study protocol and informed consent information for patients in clinical trials must also be submitted to an institutional
review board (IRB) for approval. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently,
for failure to comply with the IRB’s requirements, or may impose other conditions.
Clinical trials to support NDAs for marketing
approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, the initial introduction of the
drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side
effects associated with increasing doses, and, if possible, early evidence of effectiveness. Phase 2 usually involves trials in a limited
patient population to determine the effectiveness of the drug for a particular indication, dosage tolerance and optimum dosage, and to
identify common adverse effects and safety risks. If a drug demonstrates evidence of effectiveness and an acceptable safety profile in
Phase 2 evaluations, Phase 3 trials are undertaken to obtain the additional information about clinical efficacy and safety in a larger
number of patients, typically at geographically dispersed clinical trial sites, to permit FDA to evaluate the overall benefit-risk relationship
of the drug and to provide adequate information for the labeling 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. 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.
After completion of the required clinical testing,
an NDA is prepared and submitted to FDA. FDA approval of the NDA is required before marketing of the product may begin in the U.S. The
NDA must include the results of all nonclinical, clinical and other testing and a compilation of data relating to the product’s
pharmacology, chemistry, manufacture and controls. The cost of preparing and submitting an NDA is substantial. The submission of most
NDAs is additionally subject to a substantial application user fee, and the applicant under an approved NDA is also subject to an annual
program fee for each prescription product. These fees are typically increased annually. Sponsors of applications for drugs granted Orphan
Drug Designation are exempt from these user fees.
FDA has 60 days from its receipt of an NDA to
determine whether the application will be filed based on the agency’s threshold determination that it is sufficiently complete
to permit substantive review. Once the submission is filed, FDA begins an in-depth review. FDA has agreed to certain performance goals
in the review of NDAs to encourage timeliness. Applications for most standard review drug products are reviewed within twelve months
from submission of NDAs for new molecular entities (NMEs) and ten months from submission of NDAs for non-NMEs. Priority review can be
applied to drugs that FDA determines offer major advances in treatment or provide a treatment where no adequate therapy exists. The review
process for both standard and priority review may be extended by FDA for three additional months to consider certain late-submitted information
or information intended to clarify information already provided in the submission.
FDA may also refer applications for novel drug
products, or drug products that present difficult questions of safety or efficacy, to an outside advisory committee – typically
a panel that includes clinicians and other experts – for review, evaluation and a recommendation as to whether the application
should be approved. FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.
Before approving an NDA, FDA will typically inspect
one or more clinical sites to assure compliance with GCP. Additionally, FDA will inspect the facility or the facilities at which the
drug is manufactured. FDA will not approve the product unless compliance with current good manufacturing practices (cGMPs) is satisfactory
and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication studied.
After FDA evaluates the NDA and the manufacturing
facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies
in the submission and may require substantial additional testing, or information, in order for FDA to reconsider the application. If,
or when, those deficiencies have been addressed to FDA’s satisfaction in a resubmission of the NDA, FDA will issue an approval
letter. FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. An approval
letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of
NDA approval, FDA may require a risk evaluation and mitigation strategy (REMS) to help ensure that the benefits of the drug outweigh
the potential risks. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe
use (ETASU). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only
under certain circumstances, special monitoring and the use of patient registries. The requirement for a REMS can materially affect the
potential market and profitability of the drug. 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.
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. 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.
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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. Under the Fast
Track program, the sponsor of a new drug candidate may request that FDA designate the drug candidate for a specific indication as a Fast
Track drug concurrent with, or after, the submission of the IND for the drug candidate. FDA must determine if the drug candidate qualifies
for Fast Track Designation within 60 days of receipt of the sponsor’s request.
If a submission is granted Fast Track Designation,
the sponsor may engage in more frequent interactions with FDA, and FDA may review sections of the NDA before the application is complete.
This rolling review is available if the applicant provides, and FDA approves, a schedule for the submission of the remaining information
and the applicant pays applicable user fees. However, FDA’s time period goal for reviewing an application does not begin until
the last section of the NDA is submitted. Additionally, Fast Track Designation may be withdrawn by FDA if FDA believes that the designation
is no longer supported by data emerging in the clinical trial process.
Orphan Drugs
Under the Orphan Drug Act, FDA may grant Orphan
Drug Designation to drugs intended to treat a rare disease or condition – generally a disease or condition that affects fewer than
200,000 individuals in the U.S. Orphan Drug designation must be requested before submitting an NDA. After FDA grants Orphan Drug Designation,
the generic identity of the drug and its potential orphan use are disclosed publicly by FDA. Orphan Drug Designation does not convey
any advantage in, or shorten the duration of, the regulatory review and approval process. 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. During the seven-year exclusivity period,
FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing
of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent FDA from approving a different
drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of Orphan Drug
Designation are tax credits for certain research and an exemption from the NDA application user fee.
Disclosure of Clinical Trial Information
Sponsors of clinical trials of FDA regulated
products, including drugs, are required to register and disclose certain clinical trial information. Information related to the product,
patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public
as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure
of the results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the trial.
Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.
Pediatric Information
Under the Pediatric Research Equity Act (PREA),
NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drug for the claimed indications in all relevant
pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.
FDA may grant full or partial waivers, or deferrals, for submission of data. With certain exceptions, PREA does not apply to any drug
for an indication for which orphan designation has been granted.
The Best Pharmaceuticals for Children Act (BPCA)
provides NDA holders a six-month extension of any exclusivity – patent or nonpatent – for a drug if certain conditions are
met. Conditions for exclusivity include FDA’s determination that information relating to the use of a new drug in the pediatric
population may produce health benefits in that population, FDA making a written request for pediatric studies, and the applicant agreeing
to perform, and reporting on, the requested studies within the statutory timeframe. Applications under the BPCA are treated as priority
applications, with all of the benefits that designation confers.
Post-Approval Requirements
Once an NDA is approved, a product will be subject
to certain post-approval requirements. 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.
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. 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. Accordingly, manufacturers must continue to expend time, money and effort in
the areas of production and quality-control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals
or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing,
or if previously unrecognized problems are subsequently discovered.
FDA strictly regulates marketing, labeling, advertising
and promotion of drugs that are placed on the market. Advertising and promotion of drugs must be in compliance with the Federal Food,
Drug, and Cosmetic Act (FDCA) and its implementing regulations and only for the approved indications and in a manner consistent with
the approved labeling. 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.
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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. Upon approval of a drug, each
of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence
Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors
in support of approval of an abbreviated new drug application (ANDA). An ANDA provides for marketing of a drug product that has the same
active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically
equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or
submit results of, nonclinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way
are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions
written for the original listed drug.
The ANDA applicant is required to certify to
the FDA concerning any patents listed for the approved product in the FDA’s Orange Book. Specifically, the applicant must certify
that (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent
has not expired but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is
invalid or will not be infringed by the new product (a Paragraph IV certification). The ANDA applicant may also elect to submit a section
viii statement certifying that its proposed ANDA label does not contain (or carve out) any language regarding the patented method-of-use
rather than certify to a listed method-of-use patent. If the applicant does not challenge the listed patents or certifies that the listed
patents will not be infringed by the new product, the ANDA application will not be approved until all the listed patents claiming the
referenced product have expired. If the ANDA applicant has provided a Paragraph IV certification, the NDA and patent holders may then
initiate a patent infringement lawsuit in response. The filing of a patent infringement lawsuit within 45 days of the receipt of a such
certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement
of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.
Exclusivity
Upon NDA approval of an NCE, 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. An ANDA may be submitted one year before
NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in the Orange Book, there may not be a
Paragraph IV certification, and, thus, no ANDA may be filed before the expiration of the exclusivity period. Certain changes to a drug,
such as the addition of a new indication to the package insert, can be the subject of a three-year period of exclusivity if the application
contains reports of new clinical investigations (other than bioavailability studies) conducted or sponsored by the sponsor that were
essential to approval of the application. FDA cannot approve an ANDA for a generic drug that includes the change during the period of
exclusivity.
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, such as esmethadone, 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. These conditions include: (1)
the single enantiomer has not been previously approved except in the approved racemic drug, (2) the NDA for the non-racemic drug includes
full reports of new clinical investigations necessary for the approval of the product conducted or sponsored by the applicant and not
submitted for approval of the racemic drug, and (3) the NDA for the non-racemic drug is not submitted for approval of a condition of
use in a therapeutic category in which the approved racemic drug has been approved or for which any other enantiomer of the racemic drug
has been approved. 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. The applicant for the non-racemic drug may make this election only in an application submitted
before October 1, 2027.
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Patent Term Extension
After NDA approval, owners of relevant drug patents
may apply for up to a five-year patent extension. The allowable patent term extension is calculated as half of the drug’s testing