UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
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 and posted 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 and post
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. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒
As of June 30, 2021 (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 $547,451,729, based on the closing price on that date as reported on the NASDAQ.
As of March 21, 2022, there were 29,369,490 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 2022 Annual Meeting of Stockholders (the "Proxy Statement"), to be filed within 120 days of the registrant's fiscal
year ended December 31, 2021, 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. Business 1
1A. Risk Factors 13
1B. Unresolved Staff Comments 32
2. Properties 32
3. Legal Proceedings 32
4. Mine Safety Disclosures 32
PART II
6. [Reserved] 34
7A. Quantitative and Qualitative Disclosures About Market Risk 38
8. Financial Statements and Supplementary Data 38
9A. Controls and Procedures 38
9B. Other Information 39
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 39
PART III
10. Directors, Executive Officers, and Corporate Governance 40
11. Executive Compensation 40
13. Certain Relationships and Related Transactions, and Director Independence 40
14. Principal Accounting Fees and Services 40
PART IV
15.0 Exhibits, Financial Statement Schedules 41
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this 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 Report on Form-10-K. 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 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 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 clinical-stage biotechnology company focused on the development of esmethadone (d-methadone, dextromethadone,
REL-1017), an N-methyl-D-aspartate (NMDA) receptor antagonist. Esmethadone is a new chemical entity (NCE) that potentially addresses areas
of high unmet medical need in the treatment of central nervous system (CNS) diseases and other disorders.
Our lead product candidate, esmethadone, is being
developed as a rapidly acting, oral agent for the treatment of depression and other potential indications. On October 15, 2019 we reported
top-line data from study REL-1017-202. 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.
In the REL-1017-202 study, 62 subjects, average
age 49.2 years, with an average Hamilton Depression Rating Scale score of 25.3 and an average Montgomery-Asberg Depression Rating Scale
(MADRS) score of 34.0 (severe depression), were randomized. Other demographic characteristics were balanced across all arms. After an
initial screening period, subjects were randomized to one of three arms: placebo, REL-1017 25 mg or REL-1017 50 mg, in addition to stable
background antidepressant therapy. Subjects in the REL-1017 treatment arms received one loading dose of either 75 mg (25 mg arm) or 100
mg (50 mg arm) of REL-1017. Subjects were treated inpatient for 7 days and discharged home at Day 9. They returned for follow-up visits
at Day 14 and Day 21. Efficacy was measured on Days 2, 4 and 7 in the dosing period and on Day 14, one week after treatment discontinuation.
61 subjects received all treatment doses and were included in the per-protocol population (PPP) treatment analysis; 57 subjects completed
all visits. All 62 randomized subjects were part of the intention-to-treat (ITT) analysis. No differences were observed between the ITT
and PPP analyses and results.
Key findings:
We observed that subjects in both the REL-1017
25 mg and 50 mg treatment groups experienced statistically significant improvement on all efficacy measures tested as compared to subjects
in the placebo group, including: the Montgomery-Asberg Depression Rating Scale (MADRS); the Clinical Global Impression – Severity
(CGI-S) scale; the Clinical Global Impression – Improvement (CGI-I) scale; and the Symptoms of Depression Questionnaire (SDQ).
Improvements 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<
0.03 and large effect sizes (a measure of quantifying the difference between two groups), ranging from 0.7 to 1.0. Similar findings emerged
from the CGI-S and CGI-I scales.
MADRS: Analysis of Change from Baseline to
Day 7 and to Day 14 ITT Population
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. Subjects experienced only mild and moderate adverse events (AEs),
and no serious adverse events, without significant differences between placebo and treatment groups. 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 major depressive disorder MDD.
Following discussions with the Food and Drug Administration
(FDA), Relmada’s adjunctive MDD Phase 3 program includes the following key attributes:
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) for the
Company’s lead product candidate, REL-1017, as an adjunctive treatment for MDD. 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 RELIANCE III study, the ongoing monotherapy trial for the Company’s lead product candidate,
REL-1017, which aims to randomize 364 patients and it is expected to be completed in mid-2022.
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. 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.
Human Abuse Potential (HAP) Study top-line
results - Oxycodone:
On July 27, 2021, we
announced top-line results that showed that all three doses of REL-1017 (25 mg, 75 mg and 150 mg, the therapeutic, supratherapeutic and
maximum tolerated doses, respectively) tested in recreational opioid users, demonstrated a highly statistically significant difference
vs. the active control drug, oxycodone 40 mg. The study’s primary endpoint was a measure of “likability” with the subjects
rating the maximum effect (or Emax) for Drug Liking “at the moment”, using a 1=100 bipolar rating scale (known as a visual
analog scale or VAS), with 100 as the highest likability, 50 as neutral (placebo-like), and 0 the highest dislike. In summary, all tested
doses of REL-1017, including the maximum tolerated dose, showed a highly statistically significant difference in abuse potential versus
oxycodone with p-values less than 0.001.
Results are detailed
in the table below:
These statistically significant data clearly demonstrate
a very meaningful difference between REL-1017 and oxycodone at all three tested doses. These results, along with previously published
literature, support the lack of opioid effects of REL-1017.
Human
Abuse Potential (HAP) Study top-line results - Ketamine:
On February 23, 2022, we announced top-line results that showed that
all three doses of REL-1017 (25 mg, 75 mg, and 150 mg, the therapeutic, supratherapeutic and maximum tolerated doses, 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 were statistically equivalent to placebo. The study's primary endpoint was a measure
of "likability" with the subjects rating the maximum effect (or Emax) for Drug Liking "at this moment", using a 1-100
bipolar rating scale (known as a visual analog scale or VAS), with 100 as the highest likability, 50 as neutral (placebo-like), and 0
the highest dislike. Consistent results are seen for the secondary endpoints.
Results
of the primary endpoint are summarized in the table below.
These statistically significant data clearly demonstrate a very meaningful
difference between REL-1017 and ketamine at all three tested doses. The REL-1017 results were also statistically equivalent to placebo.
2
Key Upcoming Anticipated Milestones
We expect multiple key milestones over the next
12-18 months. These include:
● Results of RELIANCE III monotherapy MDD trial in mid-2022.
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. 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. Of those receiving treatment with as many as four different standard antidepressants, 33% of drug-treated
depression patients do not achieve adequate therapeutic benefits according to the Sequenced Treatment Alternatives to Relieve Depression
(STAR*D) trial published in the American Journal of Psychiatry.
In addition to the high failure rate, only one of the marketed products
for depression, esketamine (marketed by Johnson and Johnson as Spravato), an in-clinic nasal spray treatment can demonstrate rapid antidepressant
effects, while the other currently approved products can take two to eight weeks to show activity. The urgent need for improved, faster
acting antidepressant treatments is underscored by the fact that severe depression can be life-threatening, due to heightened risk of
suicide.
Esmethadone Overview and Mechanism of Action
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 its adverse side effects, esmethadone is being developed as a rapidly acting, oral
agent for the treatment of depression and potentially other CNS conditions.
In chemistry an enantiomer, also known as an optical
isomer, is one of two stereoisomers that are mirror images of each other that are non-superimposable (not identical), much as one’s
left and right hands are the same except for being reversed along one axis. A racemic compound, or racemate, is one that has equal amounts
of left- and right-handed enantiomers of a chiral molecule. For racemic drugs, often only one of a drug’s enantiomers is responsible
for the desired physiologic effects, while the other enantiomer is less active or inactive.
As a single isomer of racemic methadone, esmethadone
has been shown to possess NMDA antagonist properties with virtually no traditional opioid or ketamine-like adverse events at the expected
therapeutic doses. In contrast, racemic methadone is associated with common opioid side effects that include anxiety, nervousness, restlessness,
sleep problems (insomnia), nausea, vomiting, constipation, diarrhea, drowsiness, and others. It has been shown that the left (levo) isomer,
l-methadone, is largely responsible for methadone’s opioid activity, while the right (dextro) isomer, esmethadone, at the currently
therapeutic doses used in development is virtually inactive as an opioid while maintaining affinity for the NMDA receptor.
NMDA receptors are present in many parts of the
CNS and play important roles in regulating neuronal activity and promoting synaptic plasticity in brain areas important for cognitive
functions such as executive function, learning and memory. Based on these premises, esmethadone could show benefits in several different
CNS indications.
Esmethadone (d-methadone, dextromethadone, REL-1017) in other indications
In addition to developing esmethadone as an adjunctive treatment of
MDD, we are evaluating the utility of esmethadone as a frontline monotherapy treatment for MDD.
Additionally, other indications that Relmada may
explore in the future, include, 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
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.
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.
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 $125,751,800 and $59,456,400 for the years ended December 31, 2021 and 2020,
respectively. At December 31, 2021, we have an accumulated deficit of approximately $305,067,100.
Business Strategy
Our strategy is to leverage our considerable industry
experience, understanding of CNS markets and development expertise to identify, develop and commercialize product candidates with significant
market potential that can fulfill unmet medical needs in the treatment of CNS diseases. We have assembled a management team along with
both scientific, including recognized experts in the fields of depression, and business advisors with significant industry and regulatory
experience to lead and execute the development and commercialization of esmethadone.
We plan to further develop esmethadone as our
priority program. As the drug esmethadone is an NCE, the regulatory pathway to support a new drug application (NDA) submission involves
a full clinical development program. We plan to continue to generate intellectual property (IP) that will further protect our products
from competition. We will continue to prioritize our product development activities after taking into account the resources we have available,
market dynamics and potential for adding value.
Market Opportunity
We believe that the market for addressing areas
of high unmet medical need in the treatment of CNS diseases will continue to be large for the foreseeable future and that it will represent
a sizable revenue opportunity for us. For example, the World Health Organization (WHO) has estimated that CNS diseases affect nearly 2
billion people globally, making up approximately 40% of total disease burden (based on disability adjusted life years), compared with
13% for cancer and 12% for cardiovascular disease.
The depression treatment market is segmented on
the basis of antidepressants drugs, devices, and therapies. Antidepressants are the largest and most popular market segment. The antidepressants
segment consists of large pharmaceutical and generic companies, such as Eli Lilly, Pfizer, GlaxoSmithKline, Allergan, Sage Therapeutics
and Johnson & Johnson. Some of the notable drugs produced by these companies are Cymbalta® (Eli Lilly), Effexor®
(Pfizer), Pristiq® (Pfizer), Zulresso (Sage) and Spravato (Johnson & Johnson).
Intellectual Property Portfolio and Market Exclusivity
We have over 50 issued patents and pending patent
applications related to REL-1017 for multiple uses, including psychological and neurological conditions. We have also secured an Orphan
Drug Designation from the FDA for d-methadone for “the treatment of postherpetic neuralgia,” which, upon NDA approval, carries
7-year FDA Orphan Drug marketing exclusivity. 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. (Hatch Waxman
Act) plus additional 6 month of pediatric exclusivity and up to 10 years in the E.U. We believe an extensive intellectual property estate
of US and foreign patents and applications, 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, 2021, 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. 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 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, 2021, 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.
Wonpung License Agreement
In 2007, the Company entered into a License Development
and Commercialization Agreement with Wonpung Mulsan Co, a shareholder of the Company. 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. 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, 2022, no discussions are active between the Company and Wonpung.
The Company received an upfront license fee of
$1,500,000 and will earn royalties of up to 12% of net sales for up to two licensed products it is currently developing. The licensing
terms for the ROFR products are subject to future negotiations and binding arbitration. The terms of each licensing agreement will expire
on the earlier of any time from 15 years to 20 years after licensing or on the date of commercial availability of a generic product to
such licensed product in the licensed territory.
Psilocybin License Agreement
In July 2021, we executed
a License Agreement with Arbomentis, LLC which gives us the development and commercial rights to a novel psilocybin and derivate program.
Under the terms of the agreement, we 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 us but is perpetual
and not terminable by the licensor absent material breach of its terms by us. 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. Paolo Manfredi, our Acting Chief Scientific Officer and co-inventor of REL-1017,
and Dr. Marco Pappagallo, our Acting Chief Medical Officer, are among the scientists affiliated with Arbormentis, LLC.
5
Key Strengths
We believe that the key elements for our market success include:
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 preclinical 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.
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. The conduct of the preclinical tests must comply with federal regulations and requirements, including good laboratory
practices. The results of preclinical 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 preclinical 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. 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.
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. 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 to demonstrate the efficacy of the drug. 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.
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 preclinical, 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 accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit
substantive review. Once the submission is accepted for filing, 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.
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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.
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 filing 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 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.
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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.
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, preclinical 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 doe s 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 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. 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, 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. 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 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. The applicant for the
non-racemic drug may make this election only in an application submitted before October 1, 2022.
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
phase (the time between IND application and NDA submission) and all of the review phase (the time between NDA submission and approval
up to a maximum of five years). The time can be shortened if FDA determines that the applicant did not pursue approval with due diligence.
The total patent term after the extension may not exceed 14 years, and only one patent can be extended. For patents that might expire
during the application phase, the patent owner may request an interim patent extension. An interim patent extension increases the patent
term by one year and may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension is
reduced by one year. The director of the United States Patent and Trademark Office must determine that approval of the drug covered by
the patent for which a patent extension is being sought is likely. Interim patent extensions are not available for a drug for which an
NDA has not been submitted.
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Controlled Substances
The active ingredients in esmethadone are listed in the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (CSA) and regulations promulgated by the United States Drug Enforcement Administration (DEA)
as controlled substances. The CSA and its implementing regulations establish a closed chain of distribution for entities handling controlled
substances. The DEA is responsible for enforcing the law and regulations that impose registration, security, inventory, recordkeeping,
reporting and storage requirements on entities that manufacture, distribute, import and export, and other entities handling controlled
substances. 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 DEA registration is specific to a particular location, activity, and controlled substance
schedule. For example, separate registrations are required for importation and manufacturing activities, and the authority granted under
each registration determines which schedules of controlled substances the registrant may handle. 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. Schedule I