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Item 7. Management’s Discussion and Analysis

2024-03-19 compared with 2023-03-23 · 84 added, 80 removed, 122 unchanged (57% of the section changed)

36 unchanged sentences

This was a double-blind, placebo-controlled Phase 2 clinical trial evaluating the safety, tolerability and efficacy

of two doses of REL-1017, 25 mg once a day and 50 mg once a day, as an adjunctive treatment in patients with MDD, who experienced an inadequate

response to 1 to 3 treatments with an antidepressant medication.

of two doses of REL-1017, 25 mg once a day and 50 mg once a day, as an adjunctive treatment in patients with MDD, who experienced an

inadequate response to 1 to 3 treatments with an antidepressant medication.

On December 20, 2020, the Company announced that

the first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) of REL-1017, as an adjunctive treatment for MDD.

On April 1, 2021, Relmada announced the initiation

of RELIANCE II, the second of two sister pivotal Phase 3 clinical trials (RELIANCE I and RELIANCE II) of REL-1017, as an adjunctive treatment

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 April 1, 2021, Relmada announced the initiation of RELIANCE II,

the second of two sister pivotal Phase 3 clinical trials (RELIANCE I and RELIANCE II) of REL-1017, as an adjunctive treatment for MDD.

On October 4, 2021, Relmada announced the initiation

of the RELIANCE III study, the monotherapy trial for the Company’s lead product candidate, REL-1017.

On August 9, 2022, Relmada announced that the

FDA granted Fast Track designation to REL-1017 as a monotherapy for the treatment of MDD.

On October 13, 2022, Relmada announced that its

In addition, on October 4, 2021, Relmada announced

that in order to support potential regulatory submissions seeking approval for REL-1017 as adjunctive and monotherapy treatment, the FDA

confirmed that, based on what was known at the time, Relmada would not be required to conduct a two-year carcinogenicity study of REL-1017,

as sufficient clinical data had been generated to date.

The FDA also confirmed that Relmada would not need to conduct a TQT cardiac study

in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data already provided and the data to be

generated by the Phase 3 program would be adequate to evaluate the cardiac safety profile of REL-1017.

On October 13, 2022, Relmada announced that the

RELIANCE III study, evaluating REL-1017 in the monotherapy setting for MDD, did not achieve its primary endpoint, which was a statistically

significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.

In the study, the REL-1017 treatment

arm showed a MADRS reduction of 14.8 points at Day 28 versus 13.9 points for the placebo arm, a higher than expected placebo response.

On December 7, 2022, Relmada announced that its RELIANCE I study, evaluating

REL-1017 as an adjunctive treatment for MDD, did not achieve its primary endpoint, which was a statistically significant improvement in

depression symptoms compared to placebo as measured by MADRS on Day 28.

In the study, the REL-1017 treatment arm (n= 113) showed a MADRS

reduction of 15.1 points at Day 28 versus 12.9 points for the placebo arm (n=114), which is a clinically meaningful difference of 2.2

points on the MADRS, as well as a statistically significant difference in the response rate, with a response rate of 27.2% on placebo

vs 39.8% in the REL1017 arm (p<0.05).

In addition, in order to support potential regulatory

submissions seeking approval for REL-1017 as adjunctive and monotherapy treatment, the FDA confirmed that, based on what is known at

this time, Relmada will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data have been

generated to date.

The FDA also confirmed that Relmada does not need to conduct a TQT cardiac study in humans to support cardiac safety

in potential regulatory submissions for REL-1017, as the data already provided and the data to be generated by the Phase 3 program will

be adequate to evaluate the cardiac safety profile of REL-1017.

significant improvement in depression symptoms compared to placebo as measured by the Montgomery-Asberg Depression Rating Scale (MADRS)

On December 7, 2022, Relmada announced that the

RELIANCE I, evaluating REL-1017 as an adjunctive treatment for MDD, did not achieve its primary endpoint, which was a statistically significant

improvement in depression symptoms compared to placebo as measured by the Montgomery-Asberg Depression Rating Scale (MADRS) on Day 28

Patients who completed the RELIANCE trials were eligible to rollover

into a long-term, open-label study (Study 310), which also included subjects who had not previously participated in a REL-1017 clinical

This rollover study completed subject visits on July 11, 2023.

On August 23, 2023, Relmada announced the dosing

of the first patient in RELIGHT, a Phase 3 clinical trial for REL-1017, as an adjunctive treatment for MDD.

On September 20, 2023, Relmada announced efficacy

results for the de novo (or new to treatment) patients (204 patients) and safety results for all subjects (627 patients) from the Phase

3, long-term, open-label, safety trial (Study 310) of REL-1017 in patients with Major Depressive Disorder (MDD).

Patients treated daily

with REL-1017 for up to one year experienced rapid, clinically meaningful, and sustained improvements in depressive symptoms and associated

functional impairment.

REL-1017 was well-tolerated with long-term dosing, showing low rates of adverse events and discontinuations due

to adverse events.

No new safety signals were detected.

We have not generated revenues and do not anticipate

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Total research and development expense for the

year ended December 31, 2022 was approximately $113,323,000, as compared to $90,621,600 for the same period of 2021, an increase of $22,701,400.

The increase in research and development expense was primarily due to:

Increase in other research expenses of $19,073,100 primarily associated with additional consultants contracted to assist in the execution of our Phase 3 trials;

Increase in study costs of $14,689,700 associated with the execution of three Phase 3 trials and one open label extension safety study;

Increase in pre-clinical and toxicology expenses of $225,500;

Decrease in stock-based compensation expense of $7,953,200 primarily related to warrants issued for a license agreement to Arbormentis, LLC in 2021 for $10,241,600;

Decrease in manufacturing and drug storage costs of $3,213,900 related to materials needed to complete the Phase 3 program;

Decrease in compensation expense of $119,800 due to lower employee-related costs.

year ended December 31, 2023 was approximately $54,807,400, as compared to $113,323,000 for the same period of 2022, a decrease of $58,515,600.

The decrease in research and development expense was primarily due to:

Decrease in study costs of $45,506,500 associated with the completion

execution of two Phase 3 trials and the long-term, open-label, safety study (Study 310);

Decrease in other research

expenses of $12,919,100 primarily associated with additional consultants contracted to assist in the execution of our Phase 3 trials;

Decrease in manufacturing

and drug storage costs of $924,800 related to materials needed to complete the Phase 3 program;

Decrease in stock-based compensation expense of $658,700;

Decrease in pre-clinical and toxicology expenses of $131,000;

Increase in compensation expense of $1,624,500 due to higher employee-related costs.

General and Administrative Expense

Total general and administrative expense for the

year ended December 31, 2022 was approximately $47,926,100, as compared to $35,081,900 for the same period of 2021, an increase of $12,844,200.

The increase in general and administrative expenses was primarily due to:

Increase in stock-based compensation expense of $11,653,600 primarily related to options granted to employees and the board of directors during 2021;

Increase in other general and administrative expenses of $1,762,100 due to increases in professional fees and consulting expenses during 2022;

Decrease in compensation expense of $571,500 due to lower employee-related costs.

Total general and administrative expense for the year ended December

31, 2023 was approximately $48,894,900, as compared to $47,926,100 for the same period of 2022, an increase of $968,800.

in general and administrative expenses was primarily due to:

Increase in compensation expense of $2,242,000 due to higher employee-related costs;

Increase in stock-based

compensation expense of $275,000 primarily related to options granted to employees and the board of directors during 2023;

Decrease in other general and administrative expenses

of $1,548,200 due to decreases in professional fees and consulting expenses during 2023.

Other Income, Net

Gain on settlement fees was approximately $6,351,600 received from

a settlement during 2022.

Gain on settlement fees was approximately $6,351,600

received from a settlement during 2022.

There was no gain on settlement of fees during 2023.

Interest/investment income was approximately $5,151,700

for the year ended December 31, 2023 compared to approximately $2,659,400 for the same period of 2022, an increase of $2,492,300.

increase was primarily related to a lower average investment balance during 2021 as compared to 2022.

increase was primarily related to higher returns from higher interest rates, offset by lower average investment balance during 2023 as

compared to 2022.

Realized loss on short-term investments was approximately

$585,500 compared to approximately $636,000 for the same period of 2021, a decrease of $50,500.

The decrease was related to the timing

of the sales of short-term investments along with market conditions.

Unrealized loss on short-term investments was

approximately $4,220,300 compared to approximately $611,400 for the same period of 2021, an increase of $3,608,900.

The increase was related

to the market conditions.

$4,064,400 compared to approximately $585,500 for the same period of 2022, an increase of $3,478,900.

The increase was related to the

timing of the sales of short-term investments along with market conditions.

Unrealized gain on short-term investments was

approximately $3,823,200 compared to an unrealized loss of approximately $4,220,300 for the same period of 2022, an increase of $8,043,500.

The increase was related to the market conditions.

The Company did not provide for income taxes

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respectively, based on the factors described above.

As shown in the accompanying financial statements,

the Company incurred negative operating cash flows of $103,801,617 for the year ended December 31, 2022 and has an accumulated deficit

of $462,110,935 from inception through December 31, 2022.

As shown in the accompanying financial statements, the Company incurred

negative operating cash flows of $51,659,206 for the year ended December 31, 2023 and has an accumulated deficit of $560,902,681 from

inception through December 31, 2023.

Relmada has funded its past operations through

equity raises and most recently in the year ended December 31, 2022, Relmada raised $42,728,599 in net proceeds from the sale of common

stock, $1,264,523 through the exercise of warrants, and $703,720 through the exercise of options.

Management believes that due to the recent equity

raises completed and exercises of options and warrants and the resulting cash position on its balance sheet, it has obtained sufficient

funding, based on its budgeted cash flow requirements, to continue ongoing operations for at least 12 months from the filing of this

annual report.

equity raises and warrant and stock option exercises.

believes that due to previous equity raises completed and exercises of options and warrants and the resulting cash position on its balance

sheet, it has sufficient funding, based on its budgeted cash flow requirements, to continue ongoing operations for at least 12 months

from the filing of this annual report.

The following table sets forth selected cash flow information for

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$ (103,801,617 )

Cash provided by (used in) investing activities

Cash provided by investing activities

Cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

$ (1,304,337 )

Cash provided by financing activities

Net increase/(decrease) in cash and cash equivalents

$ (39,047,534 )

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This was offset by non-cash expenses which primarily consisted of stock-based

compensation of $44,194,765 and a gain on settlement of $6,351,606.

There were realized and unrealized losses on short term investments

of $585,522 and $4,220,255, respectively.

In addition, there were increases in operating assets and liabilities for the year ended December

31, 2022 of $10,593,270.

compensation of $43,811,149.

There were realized losses and unrealized gains on short term investments of $4,064,391 and $3,823,234, respectively.

In addition, there were increases in operating assets and liabilities for the year ended December 31, 2023 of $3,080,234.

For the year ended December 31, 2022, cash used

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This was offset by non-cash expenses which primarily

consisted of stock-based compensation of $40,494,476 and depreciation expense of $1,258.

There were realized and unrealized losses on

short term investments of $636,012 and $611,382, respectively.

consisted of stock-based compensation of $44,194,765 and a gain on settlement of $6,351,606.

There were realized and unrealized losses

on short term investments of $585,522 and $4,220,255, respectively.

In addition, there were increases in operating assets and liabilities

for the year ended December 31, 2022 of $10,593,270.

For the year ended December 31, 2023, cash provided by investing activities

was $50,453,332, due to $90,463,532 of purchases of short term investments offset by $140,916,864 of sales of short term investments.

For the year ended December 31, 2022, cash provided

by investing activities was $19,733,609, due to $47,293,763 of purchases of short term investments offset by $67,027,372 of sales of short

term investments.

For the year ended December 31, 2021, cash used

in investing activities was $54,118,036, due to $222,981,675 of purchases of short term investments offset by $168,863,639 of sales of

by investing activities was $19,733,609, due to $47,293,763 of purchases of short term investments offset by $67,027,372 of sales of

short term investments.

Net cash provided by financing activities for

the year ended December 31, 2022, was $45,020,474 due to proceeds from issuance of common stock of $42,728,599, proceeds from warrants

exercised for common stock of $1,264,523, proceeds from options exercised for common stock of $703,720, proceeds from 16b short swing

profit of $373,632 offset by the payment of fees for warrants issued for common stock of $50,000.

Net cash used in financing activities for the

year ended December 31, 2023, was $98,463 due to ATM reactivation fees.

Net cash provided by financing activities for

the year ended December 31, 2022, was $45,020,474 due to proceeds from issuance of common stock of $42,728,599, proceeds from warrants

exercised for common stock of $2,628,061, proceeds from options exercised for common stock of $668,431.

exercised for common stock of $1,264,523, proceeds from options exercised for common stock of $703,720, proceeds from Section 16b short

swing profit of $373,632 offset by the payment of fees for warrants issued for common stock of $50,000.

Effects of Inflation

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The Company is obligated to pay approximately

$274,000 under 2 office operative leases over the next year.

$171,800 under 2 leases for office space over the next year.

We do not have a seasonal business cycle.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis