Item 1. Business
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.
On
October 7, 2019, our application to list our common stock on the Nasdaq Capital Market was approved. On October 10, 2019,
our common stock began trading on Nasdaq under our existing symbol, “RLMD.”
On
December 19, 2019, the Board of Directors of the Company approved a change to its end of fiscal year from June 30 to December
31. The change in fiscal year became effective for the Company’s 2020 fiscal year, which began January 1, 2020 and ended
December 31, 2020. Accordingly the Company filed the transition report on Form 10-KT for the six-month period from July 1, 2019
through December 31, 2019 within the time period prescribed by the Securities and Exchange Commission.
Our lead product candidate, esmethadone,
is an NCE being developed as a rapidly acting, oral agent for the treatment of depression and other potential indications. We
have previously completed Phase 1 single and multiple ascending dose studies and 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).
The
improvement on the MADRS appeared on Day 4 in both REL-1017 dose groups and continued through Day 7 and Day 14, seven days after
treatment discontinuation, with P values< 0.03 and large effect sizes (a measure of quantifying the difference between two
groups), ranging from 0.7 to 1.0. Similar findings emerged from the CGI-S and CGI-I scales.
MADRS:
Analysis of Change from Baseline to Day 7 and to Day 14 ITT Population
Day
2
Day
4
Day
7
Day
14
LS
Means Difference
P-value
d
LS
Means Difference
P-value
d
LS
Means Difference
P-value
D
LS
Means Difference
P-value
d
REL-1017
25mg vs Placebo
-1.9
0.4340
0.3
-7.9
0.0087
0.9
-8.7
0.0122
0.8
-9.4
0.0103
0.9
REL-1017
50mg vs Placebo
-0.3
0.9092
0.0
-7.6
0.0096
0.8
-7.2
0.0308
0.7
-10.4
0.0039
1.0
1
LS
= Least Squares; d = Cohen’s effect size
The study also supported the favorable
tolerability profile of REL-1017, which was also observed in the Phase 1 studies. Subjects experienced 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 2 clinical study were of the same nature as those observed in the Phase 1 clinical studies in esmethadone, and importantly
there was no evidence of either treatment induced psychotomimetic and dissociative AEs or withdrawal signs and symptoms upon treatment
discontinuation.
Phase
3 Program
On
December 20, 2020 we 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).
Key
points of the Phase 3 program agreed upon in discussions with FDA include:
● The
Phase 3 program will consist of two sister, two-arm, placebo-controlled clinical trials.
Each trial will be conducted in 55 clinical sites in the United States and will include
approximately 400 MDD patients with inadequate response to standard antidepressants
in their current depression episode. Patients will add either a 25 mg oral dose
of REL-1017 once per day or placebo to their ongoing antidepressant treatment.
● The
primary endpoint to be evaluated will be the change from baseline on the Montgomery and
Asberg Depression Rating Scale (MADRS) score at day-28 for REL-1017 compared to
placebo. Success on this endpoint with the collection of sufficient safety data
would support the use of REL-1017 for chronic treatment, if approved.
● The
change from baseline and the 7-day MADRS score will serve as a key secondary endpoint
and will provide data on the rapid onset of treatment effect; statistically significant
separation between REL-1017 and the control group was achieved by day 4 in the Phase
2 proof-of-principle trial completed in 2019.
● The
Company expects to initiate the second Phase 3 trial, RELIANCE II, in the first half
of 2021. Patients who complete RELIANCE I and RELIANCE II will be eligible to rollover
into the long-term, open-label study, which is also expected to include subjects who
had not previously participated in a REL-1017 clinical trial.
Key
Upcoming Anticipated Milestones
We
expect multiple key milestones over the next 12-18 months. These include:
● Start
of RELIANCE II, the second pivotal Phase 3 adjunctive MDD trial in the first half of 2021.
●
Start of Phase 2 monotherapy MDD trial in the first half of 2021.
●
Results of oxycodone human abuse potential study in the second quarter of 2021.
●
Results of IV ketamine human abuse potential study in the fourth quarter of 2021.
● Results
of RELIANCE I and RELIANCE II adjunctive MDD trials in the first half of 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 four 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.
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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 planning to evaluate the utility of esmethadone as a front line 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.
Our Corporate History and Background
We are a clinical-stage, publicly traded
biotechnology company developing NCEs and novel versions of proven 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 prospective 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 $59,456,400 for the year ended December
31, 2020, $8,196,500 for the six months ended December 31, 2019, and $17,318,100 for the year ended June 30, 2019, respectively.
At December 31, 2020, we have an accumulated deficit of approximately $179,315,300.
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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, under the Food and Drug Administration Amendment
Act Section 505(u) provision, required to support an NDA submission will consist of conducting a full clinical development program.
We plan to also 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, if pursed
and upon potential NDA approval, would carry 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 of in the E.U. We believe an extensive intellectual property estate of US and foreign patents and applications, will protect
our technology and products once our patent applications for our products are approved.
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,
2020, the Company has not generated any revenue related to this license agreement.
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.
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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 “Key Man Term”).
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 2021, 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.
Key
Strengths
We
believe that the key elements for our market success include:
●
Compelling lead product opportunity, esmethadone currently in Phase 3 trial for the adjunctive treatment of MDD.
●
Successful Phase 1 safety studies of esmethadone and strong clinical activity signal in depression established in three independent animal models.
●
Potential in additional multiple indications in underserved markets with large patient population, such as MDD, other affective disorders, and cognitive disorders.
●
Scientific support of leading experts: Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions such as Harvard, Cornell, Yale, and University of Pennsylvania.
●
Substantial IP portfolio and market protection: approved and filed patent applications provide coverage beyond 2030. In addition, some of our drugs, including esmethadone have also been designated as Orphan Drugs by the FDA, thereby providing seven years of market exclusivity at launch.
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 considerable 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 product approved for sale.
5
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 new drug applications (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.
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.
6
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 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.
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.
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.
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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 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.
Controlled Substances
The active ingredients in esmethadone are
listed by the United States Drug Enforcement Administration, or DEA, as controlled substances under the U.S. Controlled Substances
Act of 1970, or CSA. The Controlled Substances Act and its implementing regulations establish a closed chain of distribution for
entities handling controlled substances. The CSA and regulations enforced by the DEA impose registration, security, recordkeeping
and reporting, storage, manufacturing, distribution, importation, exportation, and other requirements on entities handling controlled
substances. The DEA requires 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.
The CSA categorizes 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 substances by definition have a high potential for abuse, have no currently accepted medical use in
treatment in the U.S. and lack accepted safety for use under medical supervision. They may not be marketed or sold for dispensing
to patients in the U.S. Pharmaceutical products having a currently accepted medical use and that are otherwise approved for marketing
may be listed as Schedule II, III, IV, or V substances, with Schedule II substances presenting the highest potential
for abuse and physical or psychological dependence, and Schedule V substances presenting the lowest relative potential for
abuse and dependence. Schedule II substances (as well as substances defined as narcotics in any Schedule) are subject to most regulatory
requirements and restrictions, such as recordkeeping, reporting and security. For example, all Schedule II drug prescriptions
must be signed by a physician, physically presented to a pharmacist in most situations unless they are electronically prescribed
pursuant to DEA regulations, and cannot be refilled. Schedules III, IV and V controlled substances are subject to fewer restrictions.
The
DEA inspects manufacturers, distributors, importers, and exporters to review compliance with the CSA and DEA regulations including
security, record keeping and reporting prior to issuing a controlled substance registration. The specific security requirements
vary by the type of business activity and the schedule and quantity of controlled substances handled by the registrant. The most
stringent requirements apply to manufacturers of Schedule I and Schedule II substances. Manufacturers and distributors
must also submit regular reports to the DEA of the distribution of Schedule I and II controlled substances, Schedule III
narcotic substances, and other designated substances. All DEA registrants must report any controlled substance thefts or significant
losses and must obtain authorization to destroy or dispose of controlled substances. In addition to maintaining an importer and/or
exporter registration, importers and exporters of controlled substances must obtain a permit for every import or export of a Schedule
I or II substance and a narcotic substance in Schedule III, IV and V. For all other drugs in Schedule III, IV and V, importers
and exporters must submit an import or export declaration.
The
DEA establishes annually an aggregate production quota for the amount of substances within Schedules I and II and certain Schedule
III substances, that may be produced in the U.S. based on the DEA’s estimate of the quantity needed to meet legitimate medical,
scientific, research and industrial needs. The aggregate quota for each controlled substance is allocated among the various individual
manufacturers through an application process. Manufacturers may not exceed the manufacturing or procurement quota granted in a
given year. The quotas apply equally to the manufacturing of the active pharmaceutical ingredient and production of dosage forms.
The DEA may adjust aggregate production quotas and individual manufacturing or procurement quotas from time to time during the
year, although the DEA has substantial discretion concerning whether or not to make such adjustments.
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Failure to maintain compliance with applicable
DEA requirements, particularly as manifested in the loss or diversion of controlled substances, can result in an enforcement action.
The DEA may seek civil penalties, refuse to renew necessary registrations, or initiate administrative proceedings to revoke those
registrations. In certain circumstances, violations could lead to criminal prosecution.
The various states, commonwealths, and
the District of Columbia, also regulate controlled substances and impose similar licensing, recordkeeping, and reporting requirements
on entities that handle controlled substances. Entities must independently comply with the various state requirements in addition
to the federal controlled substance requirements.
Other Healthcare Laws
In the United States, biotechnology company
activities are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not
limited to, the Centers for Medicare & Medicaid Services (CMS), other divisions of the U.S. Department of Health and Human
Services (e.g., the Office of Inspector General and the Office for Civil Rights), the U.S. Department of Justice (DOJ) and individual
U.S. Attorney offices within the DOJ, and state and local governments. For example, research, sales, marketing and scientific/educational
grant programs have to comply with the anti-fraud and abuse provisions of the Social Security Act, the federal false claims laws,
the privacy and security provisions of the Health Insurance Portability and Accountability Act (HIPAA) and similar state laws,
each as amended, as applicable.
Also, many states have similar fraud and
abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several
states, apply regardless of the payor.
Data privacy and security regulations by
both the federal government and the states in which business is conducted may also be applicable. HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, imposes requirements
relating to the privacy, security and transmission of individually identifiable health information. HIPAA requires covered entities
to limit the use and disclosure of protected health information to specifically authorized situations and requires covered entities
to implement security measures to protect health information that they maintain in electronic form. Among other things, HITECH
made HIPAA’s security standards directly applicable to business associates, independent contractors or agents of covered
entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable
to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal
courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.
In addition, state laws govern the privacy and security of health information in specified circumstances, many of which differ
from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
Insurance Coverage and Reimbursement
Significant uncertainty exists as to the
insurance coverage and reimbursement status of any products for which we may obtain regulatory approval. In the United States,
sales of any product candidates for which regulatory approval for commercial sale is obtained will depend in part on the availability
of coverage and adequate reimbursement from third-party payors. Third-party payors include government authorities and health programs
in the United States such as Medicare and Medicaid, managed care providers, private health insurers and other organizations. These
third-party payors are increasingly reducing reimbursements for medical products and services. The process for determining whether
a payor will provide coverage for a drug product may be separate from the process for setting the reimbursement rate that the payor
will pay for the drug product. Third-party payors may limit coverage to specific drug products on an approved list, or formulary,
which might not include all of FDA-approved drugs for a particular indication. A payor’s decision to provide coverage for
a drug product does not imply that an adequate reimbursement rate will be approved. Further, coverage and reimbursement for drug
products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming
and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately,
with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
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Corporate
Information
Our
principal executive offices are located at 880 Third Avenue, 12th Floor, New York, New York 10022 and our telephone number is
(646) 876-3459. Our website address is www.relmada.com. The information contained in, or that can be accessed
through, our website is not part of, and is not incorporated in, this Report.
A vailable
Information
Reports
we file with the Securities and Exchange Commission (SEC) pursuant to the Exchange Act of 1934, as amended (the Exchange Act),
including annual and quarterly reports, and other reports we file, can be inspected and copied at the public reference facilities
maintained by the SEC at 100 F Street NE, Washington, D.C. 20549.
Human Capital
As of December 31, 2020, we had a total
of 14 employees. We understand people are our greatest asset and that our innovation and operational excellence are ultimately
noted in our human capital. Our success depends in large part on our ability to recruit, develop and retain a qualified, productive,
and engaged workforce.
Inclusion & Diversity
Inclusion and
diversity is a focus of our corporate human capital strategy. By embracing inclusion and diversity, we enhance our work environment
and drive business success. We endeavor to create a culture of inclusion in which our employees feel empowered to bring their full,
authentic selves to work and pursue their professional goals in a setting of equality. Fostering such a culture welcomes different
perspectives and generates innovation and growth. We honor the diversity of our employees—in gender, race/ethnicity, age,
gender identity, sexual orientation, socio-economic status, language, nationality, abilities and life experiences. As of December
31, 2020, our employee population was approximately 64% female.
Total Rewards
and Employee Engagement
We maintain a
competitive compensation and benefits package including incentive compensation tied to both company and individual performance,
and retirement benefits. Our performance-based compensation strategy is designed to recognize and reward employees for their contribution
to our success, and we strive to provide strong, equitable incentives for performance. Compensation is comprised of two elements:
base compensation, which is determined based upon a number of factors, including size, scope and impact of the employee’s
role, the market value associated with the employee’s role, leadership skills, length of service and individual performance;
and an annual bonus, which is a cash award determined based on a combination of individual and company performance during the period
to which the bonus relates. We seek to determine compensation on the basis of merit and without regard to demographic characteristics.
During 2020, we employed a third-party consultant to assist us in evaluating our pay practices. In conducting this exercise, we
found no meaningful difference in compensation based upon gender, race or any other defining characteristic examined.
COVID-19 Response
We moved swiftly
in our response to the COVID-19 pandemic to promote the safety of our associates and best serve our members and communities. In
March of 2020, we transitioned the out workforce to remote work environments, while maintaining service operations. We continued
to pay employees who missed work for COVID-19 related reasons and avoided role reductions as a direct result of COVID-19.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.