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 terminating 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 was 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 was terminated. Currently, our lead product, NDV-01 is a novel, controlled-release intravesical formulation of gemcitabine and docetaxel. NDV-01 is currently in a Phase 2 clinical trial in Israel to assess its safety and efficacy in patients with aggressive forms of NMIBC. We intend to develop NDV-01 for two separate indications: (1) the treatment of high-risk, 2nd line Bacillus Calmette-Guérin (BCG)-unresponsive NMIBC and (2) the treatment of intermediate risk patients in the adjuvant setting. We expect to initiate Phase 3 programs for each indication mid-2026. Our second product, sepranolone is a novel neurosteroid epimer of allopregnanolone. Sepranolone is being developed for the potential treatment of PWS, with additional potential indications in TS, essential tremor and other diseases related to excessive GABAergic activity. We expect to initiate a Phase 2b study in PWS mid-2026. 17 Progress in Strategic Execution 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 with additional potential indications in TS, essential tremor and other diseases related to the excessive GABAergic activity. On March 25, 2025, Relmada announced the in-license agreement from Trigone Pharma Ltd. (Trigone) of NDV-01, a novel delivery formulation of a widely used chemotherapeutic regimen used to treat NMIBC. Key Upcoming Anticipated Milestones We expect multiple key milestones over the next 12 months. These include: ● NDV-01 United States Investigational New Drug (IND) filing with the U.S. Food and Drug Administration (FDA) to initiate a clinical trial in NMIBC – Mid-2026 ● NDV-01 High-risk, 2nd line BCG-unresponsive NMIBC Phase 3 Trial Initiation - Mid-2026 ● NDV-01 Intermediate Risk in the Adjuvant Setting Phase 3 Trial Initiation – Mid-2026 ● Sepranolone - Initiation of a Phase 2 clinical trial in PWS – Mid-2026 ● NDV-01 Initial 3-Month Data from Phase 3 High-risk, 2nd line BCG-unresponsive NMIBC Trial – Year-end 2026 18 Our Development Programs NDV-01 Program NDV-01, our lead program, was in-licensed on March 24, 2025, NDV-01, is a novel intravascular delivery technology designed for the long-acting, controlled release of gemcitabine and docetaxel. This combination therapy has gained significant interest as an alternative to BCG for treating NMIBC, especially given the global BCG shortage since 2019 and for patients that do not respond adequately to BCG. 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 5 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, followed 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). Twelve-Month Safety and Efficacy Data We obtained twelve-month safety and efficacy data for our Phase 2 study of NDV-01 in high-risk NMIBC. Among 48 enrolled patients who received at least one dose, no new safety signals were observed with respect to the type, frequency or severity of adverse events. No patients experienced Grade ≥3 treatment-related adverse events, and no patients discontinued treatment due to adverse events. Of the 48 patients, 30 (63%) experienced a treatment-related adverse event. Among treatment-related adverse events, 54% were transient uncomfortable urination (dysuria), 8% were asymptomatic positive urine culture and 8% were hematuria. Efficacy and Tolerability Efficacy Evaluable Patients (Complete Response (CR)) (n/N) % Anytime 36/38 95 % 3 month 33/38 87 % 6 month 25/29 76 % 9 month 22/26 85 % 12 month 19/25 76 % 12 month KM analysis - 83 % N= 48 patients in overall population; KM: Kaplan-Meier analysis; 10 patients awaiting 3 month response assessment BCG-UR Subpopulation* CR (n/N) % Anytime 16 /17 94 % 3 month 14 /17 82 % 6 month 12 /14 86 % 9 month 10 /11 91 % 12 month 8 /10 80 % 12 month KM analysis - 84 % N= 20 patients dosed in BCG-UR subpopulation; * BCG-UR defined by FDA definition; BCG-UR: Bacillus Calmette-Guérin (BCG)- Unresponsive; KM: Kaplan-Meier analysis; 3 patients awaiting 3 month assessment ● No patient had progression to muscle-invasive disease ● No patient underwent radical cystectomy 19 The Company also previously announced the successful completion and receipt of written feedback from a Type B pre-IND submissions with the U.S. Food and Drug Administration (FDA) regarding the planned Phase 3 program for NDV-01 in NMIBC patients. Relmada secured FDA alignment on certain key elements of the planned Phase 3 pivotal program for NDV-01, expected to begin in mid-2026, and incorporating two studies for two separate indications: ● A single-arm, open-label clinical trial in this high-grade, BCG-unresponsive with Carcinoma in situ (CIS) population ● A single registrational study in intermediate risk NMIBC in the adjuvant setting, which will follow an open-label, randomized-to-observation design Also, importantly, the FDA agreed with our proposal to rely on FDA’s prior findings of safety for Gemzar and Taxotere and published literature for the non-clinical safety assessment of NDV-01 because this is a proposed 505(b)(2) approval. About the Planned High-Grade Registrational Study The planned pivotal Phase 3 study in 2nd-line, refractory, high-grade BCG-unresponsive NMIBC with CIS will be an open-label, single-arm trial evaluating: ● Primary endpoint: CR rate at any time ● Key secondary endpoint: DOR ● Assessments: Cystoscopy, cytology, and biopsy per protocol The design reflects FDA’s written guidance on the study population, endpoint selection, and evaluation methodology and is consistent with prior FDA precedents for single-arm registrational trials in NMIBC. About the Planned Intermediate-Risk Registrational Study The planned pivotal Phase 3 study in intermediate-risk NMIBC in the adjuvant setting will be an open label randomized-to-observation study: ● Primary endpoint: Disease Free Survival (DFS) ● Key secondary endpoint: DOR ● Assessments: Cystoscopy, cytology, and biopsy per protocol The design reflects FDA’s written guidance on the study population, endpoint selection, and evaluation methodology. 20 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) ● 35% greater clinical improvement and ~75% fewer patients worsening on the Tourette Syndrome-Clinical Global Impression (TS-CGI) 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. Sepranolone was well tolerated with no serious treatment emergent adverse events reported. The most common adverse events were of mild or moderate intensity related to injection sites, with pain, erythema and pruritus being the most common. Relmada expects to initiate a Phase 2 pilot study of sepranolone in PWS in mid-2026. 21 Our Corporate History and Background We are a clinical-stage, publicly traded biotechnology company developing new chemical entities (NCE) and novel versions of drug products that potentially address areas of high unmet medical need in the treatment of cancer, neurological disorders, 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 $19,052,000 for the three months ended March 31, 2026. At March 31, 2026, we had an accumulated deficit of approximately $717,319,200. 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 TS, obsessive-compulsive disorder, and gambling disorder, potentially providing coverage beyond 2038. 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. In April 2026, the Company filed a provisional patent application with the United States Patent and Trademark Office directed to pharmaceutical formulations and methods of treatment related to NDV-01. The provisional filing has the potential to form the basis for broad world-wide patent filings for the NDV-01 program. If issued, patents claiming priority to the provisional filing will be expected to have a term until April 2047. 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. 22 Results of Operations For the Three Months Ended March 31, 2026 versus March 31, 2025 Three Months Ended Three Months Ended March 31, 2026 March 31, 2025 Increase (Decrease) Operating Expenses Research and development $ 8,087,845 $ 11,951,023 $ (3,863,178 ) General and administrative 11,373,909 6,267,412 5,106,497 Total $ 19,461,754 $ 18,218,435 $ 1,243,319 Research and Development Expense Research and development expense for the three months ended March 31, 2026 was approximately $8,087,800 compared to $11,951,000 for the three months ended March 31, 2025, a decrease of approximately $3,863,200. The change was primarily driven by: ● Decrease in study costs of $6,489,500 along with the acquisition of sepranolone of approximately $2.9 million and the license agreement of NDV-01 for approximately $3.5 million in 2025; ● Decrease in other research expenses of $712,600 primarily associated with the winding down of the REL-1017 302 and 304 studies in 2025; ● Decrease in stock-based compensation expense of $30,700; ● Increase in manufacturing and drug storage costs of $2,628,600 related to materials purchased to support the start of NDV-01 and sepranolone studies; and ● Increase in compensation expense of $741,000 due to an increase in research and development employees and their related bonus. General and Administrative Expense General and administrative expense for the three months ended March 31, 2026 was approximately $11,373,900 compared to $6,267,400 for the three months ended March 31, 2025, an increase of approximately $5,106,500. The change was primarily due to: ● Increase in compensation expense of $5,339,500 due to an increase of general and administrative employees and their related bonuses; ● Increase in other general and administrative expenses of $583,500 primarily due to an increase in consulting services; and ● Decrease in stock-based compensation expense of $816,500. Other Income Interest/investment income was approximately $959,800 and $440,300 for the three months ended March 31, 2026 and 2025, respectively. The increase was due to higher average investment balance. Realized loss on short-term investments was approximately $9,900 and realized gain on short-term investments was approximately $63,000 for the three months ended March 31, 2026 and 2025, respectively. Unrealized loss on short-term investments and unrealized gain on short-term investments for the three months ended March 31, 2026 and 2025 was approximately $540,100 and $155,700, respectively. Income Taxes The Company did not provide for income taxes for the three months ended March 31, 2026 and 2025, since there was a loss and a full valuation allowance against all deferred tax assets. Net Loss The net loss for the Company for the three months ended March 31, 2026 and 2025 was approximately $19,052,000 and $17,559,500 respectively. The Company had loss per share, basic and diluted of $0.22 and $0.58 for the three months ended March 31, 2026 and 2025, respectively. 23 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 three months ended March 31, 2026, the Company incurred a net loss of $19,051,956 and had negative operating cash flows of $15,067,488. On November 5, 2025, the Company announced the closing of its underwritten offering of 40,142,000 shares of its common stock and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to 5,315,000 shares of common stock. The shares of common stock were sold at an offering price of $2.20 per share, and the pre-funded warrants were sold at an offering price of $2.199 per pre-funded warrant, which represents the per share offering price for the common stock less the $0.001 per share exercise price for each such pre-funded warrant. The net proceeds to the Company from the offering, after deducting other expenses payable by the Company, and excluding the exercise of any pre-funded warrants, were approximately $94 million. On March 9, 2026, the Company entered into a Securities Purchase Agreement for a private placement with certain institutional and accredited investors (collectively, the Purchasers). The Purchasers purchased 29,474,569 shares of the Company’s common stock, par value $0.001 per share and pre-funded warrants up to 4,210,527 shares of common stock. The closing of the Private Placement occurred on March 11, 2026. The shares of common stock were sold at an offering price of $4.75 per share, and the pre-funded warrants were sold at an offering price of $4.749 per pre-funded warrant, which represents the per share purchase price for the common stock less the $0.001 per share exercise price for each such pre-funded warrant. The net proceeds from the Purchase Agreement, after deducting fees payable by the Company, and excluding the exercise of any pre-funded warrants, were approximately $150 million. As of the date of this report, Management believes that the Company’s existing cash and cash equivalents and short-term investments will enable it to fund operating expenses and capital expenditure requirements for at least 12 months from the issuance of these unaudited condensed consolidated financial statements. Beyond that point management will evaluate the size and scope of any subsequent trials that will affect the timing of additional financings through public or private sales of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements. Any such expenditures related to any subsequent clinical trials will not be incurred until such additional financing is raised. As a result, the Company concluded the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these unaudited condensed consolidated financial statements. The following table sets forth selected cash flow information for the periods indicated below: Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Cash used in operating activities $ (15,067,488 ) $ (18,067,033 ) Cash (used in)/provided by investing activities (135,226,997 ) 15,359,713 Cash provided by financing activities 156,574,345 - Net increase/(decrease) in cash and cash equivalents $ 6,279,860 $ (2,707,320 ) For the three months ended March 31, 2026, cash used in operating activities was $15,067,488 primarily due to the net loss of $19,051,956 offset by non-cash stock-based compensation charges of $956,186 and stock appreciation rights compensation of $2,677,652. There were realized and unrealized losses on short-term investments of $9,867 and $540,097, respectively. In addition, there was an increase in operating assets and liabilities of $199,334. For the three months ended March 31, 2025, cash used in operating activities was $18,067,033 primarily due to the net loss of $17,559,465 offset by non-cash stock-based compensation charges of $3,572,769 and stock appreciation rights compensation of $3,038. There were realized and unrealized gains on short-term investments of $62,952 and $155,731, respectively. In addition, there was an increase in operating assets and liabilities of $4,769,918. For the three months ended March 31, 2026, cash used in investing activities was $135,226,997 due to $149,517,480 of purchases of short-term investments offset by $14,290,483 of sales of short-term investments. For the three months ended March 31, 2025, cash provided by investing activities was $15,359,713 due to $487,916 of purchases of short-term investments offset by $15,847,629 of sales of short-term investments. For the three months ended March 31, 2026, net cash from financing activities totaled $156,574,345 due to proceeds from the issuance of common stock for $159,999,996 offset by fees for issuance of common stock of $3,360,000 and ATM fees of $65,651. Net cash provided by financing activities for the three months ended March 31, 2025 was $0. 24 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, 2025 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, 2025. 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 March 31, 2026 have been taken into consideration in preparing the unaudited 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 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. 25