RELMADA THERAPEUTICS, INC. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FORWARD-LOOKING STATEMENT NOTICE This Quarterly Report on Form 10-Q (this Report) contains forward looking statements that involve risks and uncertainties, principally in the sections entitled “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 Quarterly 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 Quarterly Report, which may cause our or our industry’s actual results, levels of activity, performance or achievements 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 Quarterly Report on Form-10-Q. 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 Quarterly 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 Quarterly Report on Form-10-Q to conform our statements to actual results or changed expectations. Business Overview Relmada Therapeutics, Inc. (Relmada, the Company, we or us) (a Nevada corporation), is a publicly traded, clinical-stage biotechnology company. We substantially redesigned our development programs following a comprehensive strategic review in late 2024 and early 2025. We concluded in our review that the most promising path to create shareholder value was to lever our extensive drug development expertise and clinical operations capabilities by acquiring new development candidates, while pausing further work on esmethadone (d-methadone, dextromethadone or REL-1017). Hence we accelerated ongoing efforts to augment our development pipeline while diversifying its risk, which culminated in the licensing of NDV-01, a novel delivery formulation of a chemotherapy regimen widely used to treat non muscle-invasive bladder cancer (NMIBC) that is currently in Phase 2, and the acquisition of Sepranolone, a Phase 2b-ready neurosteroid with potential applications in Prader-Willi syndrome (PWS), Tourette Syndrome (TS), essential tremor and other diseases related to excessive GABAergic activity. Following the 2024 REL-1017 setback and subsequent post hoc analyses, the program has been terminated effective July 7, 2025. We also had been developing REL-P11, a modified-release formulation of psilocybin, as an investigational agent for the treatment of metabolic disease. Effective May 12, 2025, this program has been terminated. 16 Strategic Business Review and New Approach Following a comprehensive evaluation of the Company’s business strategy and growth opportunities, management and the Board of Directors have implemented on an enhanced approach aimed at maximizing shareholder value. This refined strategy remains focus on: ● Innovation – Advancing novel and differentiated therapeutic solutions ● Addressing Unmet Medical Needs – Targeting areas with significant gaps in treatment ● Large Market Opportunities – Prioritizing programs with substantial commercial potential ● Intellectual Property Protection – Strengthen and extending patent coverage to safeguard long-term value Key Strategic Priorities Under this approach, we will continue to emphasize: ● Leveraging Development Expertise – Focusing on high-value therapeutic areas while rigorously assessing development risks, market viability, and success probabilities ● Pipeline Diversification – Expanding and balancing our portfolio to mitigate risk and enhance growth potential ● Prioritizing Mid- to Late-Stage Programs – Concentrating resources on assets with clear path to commercialization ● Accelerating Market Entry – Streamline development timelines to bring therapies to patients faster ● Pursuing Cost-Effective Development Paths – Optimizing resource allocation and strategic partnerships ● Targeted Commercialization Strategy – Focusing on opportunities that require minimal sales and marketing infrastructure This strategic framework positions the Company for long-term growth while maintaining execution and financial prudence. Progress in Strategic Execution We commenced a strategic review in December 2024 of our then existing development pipeline and the opportunities open to us given our core strengths in every aspect of drug development, with particular expertise in CNS. That process recently resulted in a series of transactions that have considerably expanded and strengthened Relmada’s potential to create shareholder value. Since January 1, 2025, we have successfully closed two important transactions, NDV-01 in-licensing and Sepranolone acquisition, which align with our new strategy. On February 6, 2025, Relmada announced the acquisition from Asarina Pharma AB (Asarina) of Sepranolone, a Phase 2b ready neurosteroid being developed for the potential treatment of PWS, TS, essential tremor and other diseases related to the excessive GABAergic activity. On March 25, 2025 , Relmada announced the in-license agreement from Trigone Pharma Ltd. (Trigone) of NDV-01, a novel delivery formulation of a widely used chemotherapeutic regimen used to treat NMIBC. Key Upcoming Anticipated Milestones We expect multiple key milestones over the next 12 months. These include: ● NDV-01 Nine-month data from ongoing Phase 2 NMBIC Study – 2 nd Half 2025 ● NDV-01 Twelve-month data from ongoing Phase 2 NMBIC Study – Year end 2025 ● NDV-01 United States Investigative New Drug clearance – 1st Half 2026 ● Sepranolone - Initiation of clinical trial in PWS – 1st Half 2026 17 Our Development Programs Sepranolone Program The GABAergic system is the primary inhibitory neurotransmitter pathway. It consists of two types of receptors, GABA A and GABA B . GABA A receptors are a major target for neuropsychiatric drugs, including benzodiazepines, barbiturates and anesthetic agents. The GABAergic system regulates a host of physiological and neurological functions and their related moods and behaviors. The principal positive physiologic modulators of the GABAergic system are the neurotransmitter GABA (γ-aminobutyric acid) and the positive allosteric modulator Allopregnanolone. GABA generally inhibits nervous system excitability and thereby produces a calming effect that reduces anxiety and compulsive behavior, among other manifestations. While Allopregnanolone typically enhances GABA’s calming effects, in some individuals it paradoxically exacerbates anxiety and compulsive behavior. Sepranolone is a synthetic version of Isoallopregnanolone, a naturally occurring neurosteroid that counteracts the effects of Allopregnanolone. Sepranolone is designed to normalize GABA A receptor activity by targeting two specific receptor subtypes (alpha-2 and alpha-4) without directly interfering with GABA signaling, making it a novel and selective treatment approach for diseases such as PWS and TS and other disorders that feature compulsive behavior. Data from an open-label Phase 2a randomized study demonstrated that Sepranolone has the potential to improve TS symptoms versus standard of care alone, as measured by changes in the YGTSS scoring system (the world-standard Yale Global Tic Severity Scale) compared to baseline. In the 12-week, dual-center, parallel-group study, 26 subjects were treated with Sepranolone (10 mg, administered by subcutaneous injection twice weekly in addition to standard of care (SOC) versus standard of care alone. The Phase 2a results showed competitive tic reduction and improved quality of life while displaying no CNS off-target effects. Sepranolone not only reduced tic severity in its primary clinical endpoint as measured by YGTSS by 28% (p=0.051) – but also achieved positive results in four key secondary endpoints compared with standard of care: ● 69% greater increase of Quality of Life (using the Gilles de la Tourette Syndrome Quality of Life total score (GTS-QOL) ● 50% greater reduction in impairment (YGTSS) ● 44% greater reduction of the premonitory urge to tic (PUTS – the Premonitory Urge to Tic scale) Importantly, no off-target CNS effects or systemic side effects were observed in this study. Further, Sepranolone has been evaluated in multiple clinical neuro/hormonal studies involving over 335 participants and has demonstrated a favorable safety profile. Relmada is currently evaluating the nonclinical and clinical strategy for the development of Sepranolone. NDV-01 Program Our second program , in-licensed on March 24, 2025, NDV-01, is a novel intravesicular delivery technology designed for the long-acting, controlled release of gemcitabine and docetaxel. This combination therapy has gained significant interest as an alternative to Bacillus Calmette-Guérin (BCG) for treating NMIBC, especially given the global BCG shortage since 2019. Clinical studies have shown that gemcitabine and docetaxel achieve response rates and Recurrence-Free Survival comparable to or better than BCG. However, conventional administration is cumbersome, requiring sequential drug delivery over three to four hours, with limited tumor exposure time. NDV-01 potentially addresses these limitations by enabling a single administration in less than 10 minutes, delivering sustained, localized chemotherapy for up to 10 days. This extended exposure enhances the therapeutic effect while improving patient convenience. NDV-01 is formulated as a controlled-release intravesical therapy containing gemcitabine and docetaxel. By maintaining continuous drug exposure within the bladder, NDV-01 may optimize local efficacy while minimizing systemic absorption and associated side effects. Unlike conventional intravesical instillations, which result in fluctuating drug levels, NDV-01 provides a continuous release of both agents over 10 days. This sustained delivery may improve cancer cell eradication and reduce recurrence risk while lowering the frequency of administration. NDV-01 is currently in a Phase 2 clinical trial evaluating its safety and efficacy in patients with aggressive NMIBC. The Phase 2 study is a single-arm, single-center study evaluating the safety and efficacy of NDV-01 in patients with High Grade-NMIBC. Patients are treated with NDV-01 in a biweekly induction phase, follow by monthly maintenance for up to one year, with regular assessments via cystoscopy, cytology, and biopsy, as indicated. The primary efficacy endpoints are safety and complete response rate (Complete Response Rate at 12 months), and secondary efficacy endpoints are duration of response (DOR) and event free survival (EFS). On April 28, 2025, the Company announced positive initial data from the Phase 2 study. As of the latest cut-off, a total of 26 patients had been enrolled: 20 patients had reached the 3-month assessment with 7 reaching the 6-month assessment. 18 On August 7, 2025, the Company announced positive 6-month follow-up data from the Phase 2 study. Highlights of the 6-month follow-up data from the Phase 2 study: Table 1: Baseline characteristics (n=29) Gender n (%) Male 24 (83%) Female 5 (17%) Median Age (years) (range) 73 (54-93) Median BCG Doses (range) 6 (0-18) ● BCG-naïve (n (%)) 12 (41%) ● BCG exposed (n (%)) 4 (14%) ● BCG unresponsive (n (%)) 13 (45%) Stage (n (%)) Pure CIS 3 (10%) Ta/T1 + CIS 4 (14%) Ta 18 (62%) T1 4 (14%) % (n/N) Complete Response (CR) Anytime 91% (21/23) 3 months 83% (19/23) 6 months 90% (19/21)* * One subject has reached the 9-month assessment and had a CR. No patient had progression to muscle invasive disease. No patient underwent a radical cystectomy. No patient had >= Grade 3 treatment related adverse events and no patients discontinued treatment due to adverse events. Our Corporate History and Background We are a clinical-stage, publicly traded biotechnology company developing NCEs and novel versions of drug products that potentially address areas of high unmet medical need in the treatment of cancer, neurological disorders, depression and other diseases. Currently, none of our product candidates has been approved for sale in the United States or elsewhere. We have no commercial products nor do we have a sales or marketing infrastructure. In order to market and sell our products we must conduct clinical trials on patients and obtain regulatory approvals from appropriate regulatory agencies, like the FDA in the United States, and similar organizations elsewhere in the world. We have not generated revenues and do not anticipate generating revenues for the foreseeable future. We had a net loss of approximately $27,425,900 for the six months ended June 30, 2025. At June 30, 2025, we had an accumulated deficit of approximately $668,308,000. 19 Business Strategy Our strategy is to leverage our considerable industry experience, understanding of pharmaceutical markets and development expertise to identify, develop and commercialize product candidates with significant market potential that can fulfill unmet medical needs. We have assembled a management team along with both scientific advisors, and business advisors with significant industry and regulatory experience to lead and execute the development and commercialization of our product candidates. Intellectual Property Portfolio and Market Exclusivity We have more than 40 issued patents and pending patent applications related to Sepranolone for multiple uses, including diseases and disorders exhibiting compulsive behaviors such as PWS, TS, obsessive-compulsive disorder, and gambling disorder, potentially providing coverage beyond 2030. We have more than 10 issued patents and pending patent applications related to NDV-01 for multiple uses, including formulations and methods for controlled release of therapeutics for treatment of diseases such as bladder cancer, potentially providing coverage beyond 2038. Key Strengths We believe that the key elements for our market success include: ● Compelling lead product opportunities in NDV-01 and Sepranolone. ● Experienced management team with considerable drug development expertise; ● Multiple potential bladder cancer related indications for NDV-01. ● Extensive safety database for Sepranolone as well as promising signal of efficacy in Tourette Syndrome ● Substantial and growing IP portfolio for both Sepranolone and NDV-01 ● Scientific support of leading experts: Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions. Available Information Reports we file with the Securities and Exchange Commission (SEC) pursuant to the Exchange Act of 1934, as amended (the Exchange Act), including annual and quarterly reports, and other reports we file, can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street NE, Washington, D.C. 20549. 20 Results of Operations For the Three Months Ended June 30, 2025 versus June 30, 2024 Three Months Ended Three Months Ended June 30, 2025 June 30, 2024 Increase (Decrease) Operating Expenses Research and development $ 2,819,377 $ 10,721,089 $ (7,901,712 ) General and administrative 7,401,929 8,097,695 (695,766 ) Total $ 10,221,306 $ 18,818,784 $ (8,597,478 ) Research and Development Expense Research and development expense for the three months ended June 30, 2025 was approximately $2,819,400 compared to $10,721,100 for the three months ended June 30, 2024, a decrease of approximately $7,901,700. The change was primarily driven by: ● Decrease in other research expenses of $5,537,300 primarily associated with the winding down of the REL-1017 302 and 304 studies in 2025; ● Decrease in stock-based compensation expense of $1,386,700; ● Decrease in study costs of $807,900 associated with the winding down of the REL-1017 studies; ● Decrease in manufacturing and drug storage costs of $599,900; and ● Increase in compensation expense of $430,100 due to a increase in research and development employees and their related bonus. General and Administrative Expense General and administrative expense for the three months ended June 30, 2025 was approximately $7,401,900 compared to $8,097,700 for the three months ended June 30, 2024, a decrease of approximately $695,800. The change was primarily due to: ● Decrease in stock-based compensation expense of $2,353,700; ● Increase in compensation expense of $1,652,000 due to an increase of general and administrative employees and their related bonuses; and ● Increase in other general and administrative expenses of $5,900 primarily due to an increase in consulting services. Other Income Interest/investment income was approximately $321,500 and $963,000 for the three months ended June 30, 2025 and 2024, respectively. The decrease was due to lower average investment balance. Realized gain on short-term investments was approximately $47,200 and $133,100 for the three months ended June 30, 2025 and 2024, respectively. Unrealized loss on short-term investments was approximately $13,800 and $45,500 for the three months ended June 30, 2025 and 2024. Net Loss The net loss for the Company for the three months ended June 30, 2025 and 2024 was approximately $9,866,400 and $17,768,100, respectively. The Company had loss per share basic and diluted of $0.30 and $0.59 for the three months ended June 30, 2025 and 2024, respectively. Income Taxes The Company did not provide for income taxes for the three months ended June 30, 2025 and 2024, since there was a loss and a full valuation allowance against all deferred tax assets. 21 Results of Operations For the Six Months Ended June 30, 2025 versus June 30, 2024 Six Months Ended Six Months Ended June 30, 2025 June 30, 2024 Increase (Decrease) Operating Expenses Research and development $ 14,770,400 $ 24,026,395 $ (9,255,995 ) General and administrative 13,669,342 17,780,249 (4,110,907 ) Total $ 28,439,742 $ 41,806,644 $ (13,366,902 ) Research and Development Expense Research and development expense for the six months ended June 30, 2025 was approximately $14,770,400 compared to $24,026,400 for the six months ended June 30, 2024, a decrease of approximately $9,256,000. The decrease was primarily due to: ● Decrease in other research expenses of $10,773,100 primarily associated with the wind-down of the 302 and 304 studies in 2025; ● Decrease in stock-based compensation expense of $2,015,600; ● Decrease in manufacturing and drug storage costs of $736,800; ● Decrease in pre-clinical and toxicology expenses of $33,700; ● Increase in costs of $3,980,100 associated with the acquisitions of Sepranolone and NDV-01 in the first quarter of 2025 offset with a decrease of 302 and 304 study expenses due to the wind-down of these studies; and ● Increase in compensation expense of $323,100 due to an increase in research and development employees and their related bonuses. General and Administrative Expense General and administrative expense for the six months ended June 30, 2025 was approximately $13,669,300 compared to $17,780,200 for the six months ended June 30, 2024, a decrease of approximately $4,110,900. The decrease was primarily due to: ● Decrease in stock-based compensation expense of $5,539,100 related to option grants to employees and key consultants; ● Decrease in other general and administrative expenses of $281,600 primarily due to a decrease in consulting services; and ● Increase in compensation expense of $1,709,800 primarily related an increase of general and administrative employees and their related bonuses. Other Income Interest / investment income was approximately $761,700 and $2,018,900 for the six months ended June 30, 2025 and 2024, respectively. The decrease was due to lower interest rates and investment yields. Realized gain on short-term investments was approximately $110,200 for the six months ended June 30, 2024 compared to a realized gain of approximately $186,200 for the six months ended June 30, 2024. Unrealized gain on short-term investments was approximately $141,900 and $5,200 for the six months ended June 30, 2025 and 2024, respectively. Net Loss The net loss for the Company for the six months ended June 30, 2025 and 2024 was approximately $27,425,900 and $39,596,200 respectively. The Company had loss per share, basic and diluted of $0.86 and $1.31 for the six months ended June 30, 2025 and 2024, respectively. Income Taxes The Company did not provide for income taxes for the six months ended June 30, 2025 and 2024, since there was a loss and a full valuation allowance against all deferred tax assets. 22 Liquidity As shown in the accompanying audited consolidated financial statements, the Company has incurred losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue from the commercialization of its product candidates. During the six months ended June 30, 2025, the Company incurred a net loss of $27,425,907 and had negative operating cash flows of $24,468,909. Given the Company’s projected operating requirements and its existing cash and cash equivalents and short-term investments, the Company is projecting insufficient liquidity to sustain its operations through one year following the date that the financial statements are issued. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern. In response to these conditions, management is currently evaluating the size and scope of any subsequent operations and clinical trials that will affect the timing to obtain the required funding of future operations. Financing strategies may include, but are not limited to the public or private sale of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements. There can be no assurances that the Company will be able to secure additional financing, or if available, that it will be sufficient to meet its needs or on favorable terms. Because management’s plans have not yet been finalized and are not within the Company’s control the implementation of such plans cannot be considered probable. As a result, the Company concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The following table sets forth selected cash flow information for the periods indicated below: Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Cash used in operating activities $ (24,468,909 ) $ (26,299,773 ) Cash provided by investing activities 22,038,255 24,072,718 Cash (used in)/provided by financing activities (73,021 ) 221,747 Net decrease in cash and cash equivalents $ (2,503,675 ) (2,005,308 ) For the six months ended June 30, 2025, cash used in operating activities was $24,468,909 primarily due to the net loss of $27,425,907 offset by non-cash stock-based compensation charges of $7,926,448. There were realized gains and unrealized gains on short-term investments of $110,156 and $141,934, respectively. In addition, there was an increase in operating assets and liabilities of $4,717,360. For the six months ended June 30, 2024, cash used in operating activities was $26,299,773 primarily due to the net loss of $39,596,248 offset by non-cash stock-based compensation charges of $4,477,995. There were realized gains and unrealized gains on short-term investments of $186,247 and $5,248, respectively. In addition, there was an increase in operating assets and liabilities of $4,766,880. For the six months ended June 30, 2025, cash provided by investing activities was $22,038,255, due to $809,375 of purchases of short-term investments offset by $22,847,630 of sales of short-term investments. For the six months ended June 30, 2024, cash provided by investing activities was $24,072,718, due to $8,313,312 of purchases of short-term investments offset by $32,386,030 of sales of short-term investments. Net cash used by financing activities for the six months ended June 30, 2025 was $73,021 related to ATM expenses. For the six months ended June 30, 2024, cash provided by financing activities was $221,747 due to proceeds from options exercised for common stock of $246,747 offset by ATM expenses of $25,000. 23 Effects of Inflation Our assets are primarily monetary, consisting of cash and cash equivalents and short-term investments. Because of their liquidity, these assets are not directly affected by inflation. However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate at which we use our resources. Commitments and Contingencies Please refer to Note 10 in our Annual Report on Form 10-K for the year ended December 31, 2024 under the heading Commitments and Contingencies. To our knowledge there have been no material changes to the risk factors that were previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. Critical Accounting Policies and Estimates A critical accounting policy is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our unaudited condensed consolidated financial statements are presented in accordance with U.S. GAAP, and all applicable U.S. GAAP accounting standards effective as of June 30, 2025 have been taken into consideration in preparing the unaudited condensed consolidated financial statements. The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. On a continual basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such reviews, and if deemed appropriate, management’s estimates are adjusted accordingly. Actual results could differ from those estimates and assumptions under different and/or future circumstances. Management considers an accounting estimate to be critical if: ● it requires assumptions to be made that were uncertain at the time the estimate was made; and ● changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on results of operations or financial condition. We evaluate our estimates and assumptions on an ongoing basis and none of the Company’s estimates and assumptions used within the unaudited condensed consolidated financial statements involve a high level of estimation uncertainty. For additional discussion regarding the application of the significant accounting policies, see Note 3 to the Company’s unaudited condensed consolidated financial statements included in this report. 24