Greetings, and welcome to Relmada Therapeutics, Inc. third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tim McCarthy.
Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer, Sergio Traversa, and Chief Accounting and Compliance Officer, Chuck Ince. This afternoon, Relmada issued a news release providing a business update and announcing financial results for the three and nine months ended September 30, 2021, and filed its quarterly report on Form 10-Q with the SEC. Please note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Relmada's management team will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.
These forward-looking statements are qualified by the cautionary statements contained in Relmada's press release issued today and the company's SEC filings, including in the annual report on Form 10-K for the year ended December 30, 2020, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, November 11, 2021. Relmada undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now I'd like to turn the call over to Sergio. Sergio.
Thank you, Tim, and good afternoon to everyone. We also have on the call today, Maged Shenouda, that is our CFO, on top of Chuck Ince. I'm pleased to welcome you to Relmada third quarter 2021 conference call. On today's call, I will provide an update on the comprehensive development program for our lead product candidate, REL-1017, for the adjunctive and monotherapy treatment of major depressive disorder or MDD, highlight the substantial market opportunity for this compelling product candidate and review upcoming milestones. Following this, I will turn the call over to Maged Shenouda, Chief Financial Officer, for a review of the financials. I will then provide a brief overview of the data that we recently presented at the Neuroscience Education Institute Congress last week.
With that, I will begin by highlighting the point that we will have data readouts in each quarter of next year. I will elaborate further on this shortly, but in summary, in the first quarter of next year, 2022, we expect top-line results from our second human abuse potential or HAP study, this one assessing REL-1017 versus intravenous ketamine. Following this, in the second quarter, we anticipate top-line data from RELIANCE III, the ongoing monotherapy registrational phase III trial. In the third and fourth quarter of 2022, we expect top-line results from RELIANCE I and RELIANCE II respectively, the two ongoing phase III sister-to-arm placebo-controlled pivotal studies. With that, I would like now to reiterate the important development and regulatory updates that we provided for REL-1017 last month.
To begin with the RELIANCE III, which aims to randomize 364 patients, is expected to be completed in the second quarter of 2022, prior to the anticipated conclusion of RELIANCE I and RELIANCE II, the adjunctive MDD studies, which I will discuss momentarily. This MDD monotherapy study is for individuals who are diagnosed with depression and are not currently taking standard antidepressant therapy. Importantly, conducting RELIANCE III as a phase III study may meaningfully reduce the time for a potential approval of REL-1017 as an MDD monotherapy.
In addition, in order to support potential regulatory submission seeking approval for REL-1017 as a monotherapy as well as adjunctive treatment, the FDA confirmed that based on what is known at this time, Relmada will not be required to conduct a two-year carcinogenicity study of REL-1017, with an understanding that sufficient preclinical safety data has 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 a potential regulatory submission for REL-1017. As the data provided to date as well as the data to be generated from the phase III program will be adequate to evaluate and confirm the cardiac safety profile of REL-1017.
Moving on, I will now provide an update of the ongoing RELIANCE I and RELIANCE II studies, each of which will include 364 participants per study across 55 sites as well per study. As a reminder, RELIANCE I and II are designed to evaluate REL-1017 as an adjunctive treatment for MDD, and both include two arms, placebo and 25 milligrams of REL-1017. Both of which are in addition to a standard antidepressant treatment for participants who have had an inadequate response to a minimum of one and up to three standard antidepressant therapies. The clinical trial protocol remains unchanged, with the primary endpoint being change in MADRS score at day 28 and key secondary endpoints include the change in MADRS score at day seven and the change in Clinical Global Impression Severity score at day 28, the CGIS.
Both RELIANCE I and RELIANCE II are progressing with top-line data expected in the second half of next year. The RELIANCE development program also includes RELIANCE-OLS, a long-term open-label safety study that is enrolling both rollover participants from all three pivotal studies as well as de novo participants. RELIANCE-OLS is ongoing and enrolling participants as planned. Data from this long-term open-label safety study will be part of the NDA filing package. As we look ahead to the key RELIANCE clinical development program, data catalyst I outlined earlier, it is important to know that we are highly confident that we have more than sufficient power in our studies to demonstrate the desired effect and targeted decrease in MADRS score result improvement. Of significance, while REL-1017 demonstrated 8-point improvement over placebo in the phase II trial. Moving on.
Our second half study evaluating REL-1017 versus intravenous ketamine, which has an established history as an effective positive control, is ongoing. Based on the current rate of recruitment, we expect top line results from this study in the first quarter of 2022. As a reminder, in the third quarter, we announced positive top line results from our first half study evaluating REL-1017 versus oxycodone 40 milligrams as an active control. As we discussed this data at length on our last two investor calls, I won't go into too much detail here. However, I will reiterate that this study was designed in a manner that followed the FDA 2017 guidance on the assessment of the abuse potential of drugs.
Top line results for the primary endpoint showed that all three doses of REL-1017 evaluated in recreational opiate users demonstrated a highly statistically significant difference versus the active control drug oxycodone 40 mg. Notably, the highly statistically significant difference was confirmed between the active control and 150 mg of REL-1017, which is the maximum tolerated dose and six times the proposed therapeutic dose. Other secondary endpoints, such as desire of taking the drug again, were consistent with those of the primary endpoint, demonstrated no evidence of any meaningful abuse potential. Importantly, these results are consistent with HAP study results that have been seen in other drugs that affect the CNS and which have been scheduled in schedules IV, V or even unscheduled.
I also wanted to take a moment to reaffirm the need for a new therapeutic option with the potential clinical profile that REL-1017 presents. Over 17 million individuals in the U.S. suffer from MDD, and the current options are limited in their ability to help these patients. Current antidepressant standards have significant side effects and can take up to four-six weeks to show efficacy. 65% of patients do not respond to their first antidepressant treatment, and 30% do not respond to any of the current available oral treatment. Furthermore, there are only three FDA-approved adjunctive treatments for major depressive disorder. All of which are antipsychotic, which often can cause long-term serious side effects.
It is evident that new treatment options are needed, and we believe that REL-1017 has the potential to make a difference for these patients and their caregivers as a monotherapy or adjunctive treatment. I will now pass the call over to Maged for his review of financials that will then touch on the recent poster presentation at the recently held Neuroscience Education Institute Congress. Please go ahead, Maged.
Yeah, sure. Thank you, Sergio, and good afternoon, everyone. Today we issued a press release announcing our business and financial results for the three months and nine months ended September 30, 2021, which I will now review. For the third quarter ended September 30, 2021, total research and development expense was approximately $34 million as compared to $11.2 million for the comparable period of 2020. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL-1017. Total general and administrative expense for the third quarter ended September 30, 2021, was approximately $8.7 million as compared to $5.9 million for the comparable period of 2020. The increase was primarily due to an increase in personnel costs, stock-based compensation and consulting services.
For the third quarter ended September 30, 2021, we recorded a net loss of approximately $42.6 million or $2.44 per basic and diluted share, compared to a net loss of $16.9 million or $1.05 per basic and diluted share in the comparable period of 2020. Turning to the results for the nine months ended September 30, 2021. Total research and development expense was approximately $65.3 million, as compared to $21.1 million for the comparable period of 2020. The increase was primarily related to an increase in costs associated with the execution of a broader clinical program for REL-1017.
For the nine months ended September 30, 2021, General and administrative expense was approximately $26.2 million as compared to $18.8 million for the comparable period of 2020. The increase was primarily due to increase in personnel costs, stock-based compensation, and consulting services. For the nine months ended September 30, 2021, we recorded a net loss of approximately $91.4 million or $5.36 per basic and diluted share, compared to a net loss of $38.7 million or $2.52 per basic and diluted share in the comparable period of 2020.
On September 30, 2021, the company had cash and cash equivalents and short-term investments of $88.1 million, which compares to $117.1 million on December 31, 2020. I'll now hand the call back over to Sergio for further remarks on our most recent progress. Sergio?
Thank you, Maged. Earlier this month, meaning last week, we presented a total of eight posters at the NEI Congress, including three posters with new data sets resulting from post-hoc analysis from our phase II trial. First, the post-hoc analysis of the symptom of depression questionnaire, the SDQ, total and subscale scores from patients treated with REL-1017 showed improvement in subscales of cognition, motivation, anxiety, irritability, and sleep function, signaling that benefits from REL-1017 may extend well beyond just mood improvement. This data suggests that REL-1017 may have potentially meaningful implications for patients' working and social abilities. The second poster included a post-hoc analysis of a subset of MDD patients experiencing dissociative symptoms prior to treatment. It showed a clinically meaningful improvement in the Clinician-Administered Dissociative States Scale scores, which is used to measure dissociative state after REL-1017 treatment.
This suggests that REL-1017 may not only be exempt from generating dissociative symptoms such other NMDA antagonists, but it may actually be beneficial in patients affected by such symptoms. Finally, while some of the current standard of care antidepressants have shown an increase in lipid metabolism abnormalities put patients with MDD at risk, a post-hoc analysis showed that REL-1017 did not significantly alter lipids, potentially lacking in cardiovascular risk. In summary, REL-1017 development program remains on track, and we expect key data catalysts in each quarter next year. To reiterate, we expect top-line results from the second HAP study, this one assessing REL-1017 versus intravenous ketamine in the first quarter, followed by top-line data from the RELIANCE III monotherapy trial in the second quarter. In the third and fourth quarters of 2022, we expect top-line results from the RELIANCE I and RELIANCE II adjunctive trials, respectively.
Importantly, as Megan noted, our robust R&D initiatives are supported by a strong balance sheet. In closing, I remain grateful to the Relmada team for their continued hard work and dedication to executing on our mission. I would also like to extend my sincere thanks to the participants and clinical partners involved in the REL-1017 clinical trials for their effort in advancing this important therapy to the clinic as expeditiously as possible. I believe we will now open up the call for questions. Operator, can you please open up?
Yes. If you would like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Our first question is from Andrew Tsai with Jefferies. Please proceed.
Okay, great. Thanks, guys, for taking my questions. I noticed at the NEI Congress you also shared some additional secondary endpoints for the oxycodone abuse liability study. I couldn't help but notice, while the means increased a little for esmethadone on the secondary endpoints, the scores, but the median stayed at 50. So, I thought that was interesting. I was wondering if you can kind of talk about that, but at the same time, I just felt like, you know, there, you know. I guess it's part of my second question is, like, did you ever find out what the outliers were? Who scored high? What exactly high on in terms of the VAS score? And I guess, what were they exactly feeling to make them score higher?
Can you confirm that they were definitely not feeling euphoric mood or anything like that, but maybe it's because of CNS effects? Thanks.
Well, thank you, Andrew, for the question. Look, on the data that we presented at the NEI last week, the old data set is out for publication at some point, will be published, so all the details would be there. I would just summarize that you know, there is very marginal difference between primary and secondary endpoint. We can say they are very consistent and they confirm that you know, there is a slight difference from placebo that is totally expected from any CNS drug that affect the mood, especially with a massive dose of six times the therapeutic dose. But none of these data are inconsistent with the primary endpoints. It's just a confirmation. On your second question, on the...
Well, no, we did not reach out to, we cannot reach out to the subjects after they, you know, they complete the study. We don't really know who they are at all. It's all in the hands of the site, so for, you know, respect to privacy. There are some questions that has been asked in the various questionnaire, validated questionnaire in that, in the study. We did look at the outliers, though, without knowing who they are or why they were outlier. But what we have noticed is that the vast majority, I mean, there are really a single digit number of outliers. So was not, how can I say? Was not an extensive rate, likability scores across, you know, different set of subjects.
I don't remember the exact number, but it was a single digit number of patients that for whatever reason they score high. We see that as a positive signal because, though we cannot confirm, we don't, you know, we don't have. The study was not designed to detect or to show any antidepressant effect. You know, with, you know, over 90% of the subjects totally not feeling any likability and only a single digit number of subjects liking the drug significantly, we suspect that there was something in these patients that made them, in these subjects, that made them like it in particular.
That's, you know, we can speculate it could have been that they were in a depressed state or they had withdrawal symptoms from, you know, anxiety and, psycho, psychiatric, psychological withdrawal symptoms and taking a massive dose of a rapid acting antidepressant, they may have felt some benefit. I hope I answered, you know, your question. The-
Yes.
Don't know anything more than.
Very interesting.
Right.
It is. Thank you.
Look, the phase III
Yeah.
will answer all these questions extensively.
Okay.
We look forward to the ketamine data.
Right. Speaking of the phase III studies, I did have one hypothetical question is, the first, phase III monotherapy, depression data in Q2. Hypothetically, if it happened to show mixed data on efficacy, let's just say it doesn't hit day 28 or maybe it doesn't show rapid effects. I guess the question would be then, you know, why should that not be a negative read through to your phase III adjunct studies?
Well, first we hope that the data will confirm what we have seen in phase II. The only way that, that could happen. Look, we know the drug in phase II, the data are real, right? There is no doubt that there is a very, very strong efficacy signal. If that signal is not confirmed or repeated in monotherapy, the only or potentially one reason could be that there is some form of synergy between a current and existing treatment, even if it fails to show efficacy and adding an NMDA. I would not read that if, by chance, it doesn't work well in the monotherapy that we can say that, you know, the adjunctive treatment would not work as well. There may be some reason.
If you ask me directly, we don't believe that that's the case. The message is that I would not correlate the monotherapy directly to the adjunctive treatment because there is a difference, you know, adjunctive, they're taking two drugs versus one in the monotherapy. To be honest, I do believe that that's not going to be the case.
Right. Thank you. Very last question, very quickly, is just for the monotherapy study. Can you remind us the primary endpoint day 28, I guess what kind of minimum separation versus placebo on MADRS, which would be the minimum that you would like to see? And are these assumptions then similar to the phase III adjunct MDD studies? Can you just remind us one more time? Thank you.
Yeah, this one I can give you a more straight answer. The statistical plan is the same, exactly the same, for all three phase III, the two adjunctive and the monotherapy. It is designed to detect a delta of two points in the MADRS score versus placebo. If we hit two points delta, the study will be statistically significant. That's the way the statistic has been designed for all three studies. Now, the reason of two points, because rule of thumb is not like it's not in the FDA guidance, of course, but rule of thumb is that looking at all the approved products, two points as a monotherapy or even adjunctive is a clinically meaningful delta that, you know, potentially could get you an approval.
There are a lot of other factors in the approval, but in terms of like efficacy, I believe it was Professor Fava that published that two points delta. It's clinically meaningful that therefore it should be, right? It should deserve everything staying the same. It should deserve an approval. For treatment-resistant depression, that is not something that we are, you know, doing or we are looking at. 1.5-point becomes, you know, the corresponding number for potentially getting an approval.
Okay.
Consider that in phase II we had eight point delta. We left a lot of room and we wanted to be conservative. We know that, you know, phase III there is more variability, more patients, more sites. We left some room for, you know, something doesn't go the way we like it, but if we show one-fourth of the efficacy that we have seen in phase II, it still would be statistically significant.
Okay, perfect. Thank you, Sergio.
Thank you, Andrew.
Our next question is from Yatin Suneja with Guggenheim Partners. Please proceed.
Hey, guys. Thank you for taking my question. Maged, good to hear your voice. Just a couple for me.
Likewise.
With regard to the RELIANCE III, which has now been upgraded to phase III, can you just help us understand, like, what exactly was the conversation with the FDA? In terms of that led to it being phase III, because earlier you were thinking about a phase II. How is your filing strategy going to be? Are you gonna complete all three studies and then file? Just trying to get a sense of, you know, the type of label you are hoping to get. That's, you know, a couple questions on the RELIANCE. One question on the ketamine study that you're doing. Can you just help us understand what you are doing differently in this study to make sure you do get a separation between ketamine and the placebo arm, which did not happen in the first study?
Okay. Well, thank you, Yatin, first for the questions, and always very insightful. The first question was, what has changed that we are, you know, the monotherapy study has become a filing or a pivotal study? We did not actually have a conversation with the FDA in the sense that, you know, we send a proposal to make it a phase III, and we waited the traditional 30 + 30, so the 60 days that usually signal that the FDA does not have anything opposed to moving ahead with the program, and that's what we did. We waited until, you know, end of August, and then we didn't hear anything back from the FDA. We make it a phase III. There was really not a lot of difference.
The protocol is exactly the same. There was no change in the problem. The question is what has changed that makes us do a phase III instead of a phase II? Two things. One was the feedback from the FDA on the two-year carcinogenicity study and the TQT that showed that the FDA is somewhat comfortable with the safety and tolerability of the drug. Now the HAP study in July that we do believe could have been an issue with the FDA to expand a trial to 350 patients—all outpatient.
We put together all this data and, you know, we took some risk that the FDA could have said, "Well, you don't have any efficacy data as a monotherapy. Safety, we are now, you know, relatively comfortable or comfortable." There was, there is no single data that shows that the drug has any efficacy in monotherapy, although we do believe that, you know, that is not very different from adjunctive. That was the reason that we initially thought about doing a phase II and then a phase III. We saw the FDA relatively comfortable. We had the abuse data they were perceived as they are very positive and, you know, took some little risk, but it worked.
That's why we moved to, you know, we make it becoming a phase III filing study. The second question was,
It was on the ketamine, like the differences between the first study and this study to make sure that this time the ketamine and the placebo arm separate.
Oh, yeah. No, that's easy. The first failed or unsuccessful ketamine study, the reason was that oral ketamine, the bioavailability is very poor and did not work as a control. Like we had almost half of the patients, they were taking oral ketamine and we thought they were taking placebo in the qualification part of the study. They didn't work. Now we are using intravenous ketamine. That is, we kind of look at what Johnson & Johnson has done with esketamine, which is Spravato. I believe it's 50 milligrams infusion over 40 minutes, and it's kind of the standard. That definitely works as a control. There is no doubt that the control will work this time. The study has been progressing nicely.
Got it. Maybe just-
Looking forward to data.
Got it.
Yeah. On the regulatory, correct? Look, we are fast track, so we are planning to do a rolling NDA. Usually rolling NDA, you file, you know, the kind of standard, the CMC. Probably we will file the all preclinical package. We haven't really decided the final studies for the phase III, but I do believe that, you know, if they are not too far away, one from the other, it's probably worth to file all modules for the phase III NDA because we studied together. Clearly there is like a month between one and the other, then maybe we will file whatever we have available and not wait for, you know, the RELIANCE II and III. It's a bit too early.
You know, the plan is to do a rolling NDA, so we want the FDA to have enough time to review, you know, the more standard like CMC and preclinical. So if there is anything that they would like us to do more, we will have time. We won't delay the NDA. The final NDA.
Got it. Maybe one question for Maged. Can you maybe help us with the P&L? I mean, so, steep rise in R&D, just trying to get a sense how much was non-cash there and then how should we model-
Sure.
The second half of this year and the next, you know, this fourth Q and the next year. Thank you.
Thanks for the question, Yatin. With regard to non-cash components of R&D for the quarter, that was this $11.8 million for the R&D line and $6.4 million for the SG&A line. You know, with regard to just you know the remainder of the year, I would say you know I would point you to our 10-Q, which we expect to file tomorrow morning. Certainly, you know, we're not giving guidance, but you know if the question relates to expenses going forward and sort of our ability to meet that you know we believe we have sufficient funding to continue with ongoing operations for at least 12 months.
Got it. Thank you so much.
Sure.
Our next question comes from Joon Lee with Truist Securities. Please proceed.
Hi. Thanks for the update and for taking our questions. You know, I wouldn't have thought to ask this question except the fact that it's come up for another company that just reported data from TRD study. You know, given your phase II also included TRD patients, you know, I thought I'd ask, did you see any suicidal ideation in your trial as an SA? I have a follow-up.
Okay. Thank you, Joon. I knew that you know this question could have or would have come up. Look, of course, we look at the data that has been released two days ago. We only know what there was in depression, nothing more than that. The straight answer is that no, we have not seen any suicidal ideation in any of our study. We do believe that the NMDA antagonist they actually are supposed to reduce the suicidal ideation. If not, if you look, there is another for our competitor that is working on a nasal form of ketamine, and they are running the trial as a suicidal ideation reduction.
NMDA antagonist, they are specifically indicated for reducing the risk of suicide. Now, the program that showed the side effect, it increased in suicidality. Look, you know, it is a 5-HT2A agonist, right? If you remember, and I do because I spent six years on the development and launch of Prozac, right? Fluoxetine. That is a reuptake of serotonin. You know, the issue, one of the, it is a black box of serotonin agonist is suicidality. It's a totally different mechanism of action. I think, you know, we-
Got you.
Yeah, look, it's all speculative. I really don't know. It's 5-HT2A versus reuptake. So it's all speculative. But you know, if there is an explanation, this could be one. With that said, we spoke with a few specialists. When you take such a high dose of psilocybin, and these are not drug abusers, right? These are patients with depression, so they don't want to have, you know, the psychotomimetic, the trip, right? It's not something that they enjoy. If you are heavily depressed and you have treatment-resistant depression, you take a massive dose of psilocybin for more than a few minutes, you are totally confused.
That's why, you know, it's an in-clinic treatment. If you are depressed and you're, you know, you are in the state of confusion, you may, you know, mention suicidality, but, you know, I would not read too much into that. It comes momentarily and I believe it was, you know, just on initial, right after or during the acute phase. It's way too early to speculate. Way too early.
Your phase II was also inpatient, monitored for two weeks, but you saw no suicidality in spite of being an inpatient study.
Yeah, no, we have seen nothing, no.
Okay.
No issues with suicidality. We don't expect to.
The follow-up question is, you know, I was really intrigued by the poster showing symptom improvement using the SDQ scale, which was not stat sig, I believe, at day seven, which was the last day of dosing, but became stat sig seven days later. You know, what is the significance of SDQ within physician circles versus academic circles, and how is it used? Why do you think it separated like seven days later, as opposed to the last day of dosing during the trial period or during the dosing period?
Yeah, I answered the first question first. Sorry, the second question first. You know, the patient is slower to react in the self-administered, like, questionnaire. You know, when he's asked questions from the clinicians. The MADRS and the CGI, they're a lot quicker to detect a signal. The patient needs a little bit more time. They have time to go home, and they realize when they went home without taking anything, they were actually feeling better in terms of depression symptoms, and they reported that when they came in at day 14 at the clinic. It's pretty usual that there is a slower response from the SDQ compared to MADRS and CGI just because it's patient-reported spontaneously.
That's what we believe is the reason that the day 14 was better than the day seven, that the patient had to you know needed some time to get used to not having depression symptoms before you know they were reporting that. Sorry, remind me of the first question.
Oh, no.
The, the-
You know, how is it used by the physicians, the SDQ or is it purely an academic metric that that's used?
Well, I believe it was published, invented by an eminent academic. The FDA most likely they look at everything, right? Based on, you know, all the previous antidepressants approved. It is, you know, it means something, but it's only a support for the MADRS. From our conversation with the FDA, I do believe, Maged, correct me if I'm wrong, but I do believe that they consider CGI and MADRS somewhat similar.
Yes.
We try to split it in two different endpoints and they get back to us and say, "Well, you know, if you are okay with the MADRS, of course you will be okay with the CGI, right?" Don't play. I mean, we're not playing, but they are strictly correlated. SDQ is not strictly correlated. So it has some meaning.
Right.
You have to, you know, have good results on the MADRS to get approval.
All right. Well, thank you so much.
I hope I-
Yeah, thank you.
Yeah. I hope I helped.
Yeah, that's pretty good. Looking forward to all the data every quarter next year. Thank you.
Thank you.
Our next question is from Andrea Tan with Goldman Sachs. Please proceed.
Thanks for taking the question. Sergio, the first one, just a follow-up on your comments on the plans for the rolling NDA submission. Would positive results from RELIANCE III support approval for monotherapy use or would you need to run a second trial to secure that indication?
It's a good question by the way. Good afternoon. If that's our opinion, so the FDA never commented upon this. If all the three studies are positive, we do believe that one monotherapy study would be enough to, you know, to get an indication on the label. If it would be the only positive study then I don't think that it's going to work, right? We will have to run at least another one as a monotherapy. That's our current thinking.
Got it. Just wondering if you could comment on what you're seeing with enrollment in the RELIANCE I and II trials that's delaying the timing of those readouts. In particular, do you see this in any way reflecting commercial dynamics that could play out if REL-1017 were approved?
Yeah. You mean why it takes a little longer to complete the adjunctive? Look, the-
Mm-hmm.
The most simple answer is the quality of the trial. We you know pay a lot of attention on the quality of you know the trial. We really want the patients to be depressed. That you know there is a you know pretty high selection of the patient. Meaning not selection that we don't know which patient will respond or not. Definitely we want to be sure that the patient is depressed, does not have personality disorder, or does not have anything that you know would not be an appropriate patient for an antidepressant treatment. You know the failure rate from screening is about 50%. One out of two patients is not enrolled because it does not qualify.
We have very stringent inclusion and exclusion criteria. Mostly focused on safety of course, but focused also on being sure that you know, we don't enroll everybody. Enrolling is very easy. If you want just to complete the study, you can do it very quickly, but that's not what we want to do. We want a study that would reflect the effect of the program, of the drug, and that it takes a little bit more time. The monotherapy is supposed to be a lot faster. We just started now in September, so we'll see what the ramp-up is. Now the inclusion and exclusion criteria are the same as an adjunctive, but the patient selection is more patients.
Got it. Thanks, Sergio.
Thank you, Andrea Tan.
Our next question comes from Jay Olson with Oppenheimer. Please proceed.
Oh, hey, congrats on the progress and thanks for taking the questions. Maybe just to follow up on the recent competitors' results in TRD. Do you see any read across from that Compass Pathways study for psilocybin and TRD to your own psilocybin program from Arbormentis? And can you maybe give us an update on the current status of that compound?
Yeah, sure. Thank you, Jay. Nice to hear from you. Look, the first question, if there is any correlation, straight answer is no. The base of our program on psilocybin is totally different from pretty much every other competitor that works on psilocybin. We are not doing anything regarding psychiatry, and now the question is neurodegenerative diseases, and we want to leverage our expertise on the neuroplastic effect in BDNF and you know, 5-HT2A agonist at the end of the cascade pretty much results in a similar neuroplastic effect, similar to an NMDA antagonist. We want to leverage what we know and understand of that science in neurodegenerative diseases.
We use an enormously lower dose compared to the competition that works in psychiatry. The base of that is that our scientists, I say we, but it's actually our scientists. We do not believe that you need to get high or to get like a psychotomimetic whatever effect to have a neuroplastic or neuroplastogenic effect. We go for much lower dose for a chronic treatment and not in psychiatry, neurodegenerative disease. Yeah, straight answer is no. There's no correlation between what the other companies are doing, what we do. The status we work in the manufacturing. Believe it or not, it is not the easiest compound to produce synthetically. I don't know, Maggie, shut me up if I talk too much.
We actually have designed and generated our own proprietary synthesis with the PRISM chemist. We are going through the manufacturing right now and, you know, dealing with the FDA. Of course, you know, the psilocybin program we are working on is in two parts, right? One is psilocybin, you know, the molecule. That one we would like if the FDA agrees, especially because we use very low dose compared to the other players. We would like to leverage all the safety data. There is a pretty sizable package of safety for psilocybin, especially at low dose.
Definitely if the FDA agrees, then theoretically the manufacturing will be completed, then theoretically we can go straight in phase II sometime probably in second half of next year. You know, honestly, we are very busy with this massive phase III program of REL-1017. I mean, psilocybin, it's going but it is not a distraction from the real focus. The real focus is REL-1017. It will be the focus after the, you know, the phase III data then we will, you know, focus on psilocybin as well. You know, the plan is to be able to do a phase II, start the phase II sometime in the second half of next year when manufacturing will be done.
The FDA, if the FDA will agree, right, to skip the whatever preclinical and phase I as we do believe. The second part of the program is derivatives of psilocybin. It's a new chemical entity, so that is full-fledged development. We will start, we are synthesizing now, but we will start from like in vitro and I believe we are doing some animal studies now. You know, it's very, it's a lot earlier than the psilocybin and the psilocybin molecule. I hope that, you know, I answered you.
Yeah, that's great. That's super helpful. Thank you very much. Maybe just one follow-up. Can you comment on what particular forms of neurodegeneration that you're thinking about studying when you initiate your phase II trials?
We are focusing on diseases where there is damage of the nerves, some nerves. I would say acute damage. If we are right and psilocybin is very safe and especially at the doses that we're using, potentially it could speed up the recovery of the nerve or limit the damage of the nerve or speed up the recovery if there is, you know, a way to measure the recovery. I would not say more than that. Also because, you know, we are discussing with or will discuss with the FDA, so we want to be sure that they are in agreement on what we want to do.
You know, that's pretty much that would be the plan. More acute nerve injury and attempting to reduce the damage or improve the recovery time.
Great. That's super helpful. Thank you.
There is more than one indication, of course. It's not. Yeah, acute nerve damage it can be generally can happen for a variety of reasons, so.
Okay.
It's not limited to one.
Like spinal cord injury or stroke?
No spinal cord injury. I've been involved 25 years ago. I would never get close to that. Other, but not spinal cord injury.
Okay. Okay, all right. Great. Thank you so much. Appreciate the additional color.
Thank you, Jay Olson.
Thank you. Ladies and gentlemen, there are no further questions at this time. I would like to turn the call back to Sergio Traversa for any closing remarks.
Thank you, operator. Well, thank all of you for joining us on the call today. We are pleased to share our recent progress with you and REL-1017 clinical development program continue to advance. We are excited about the many important catalysts that lie ahead of us in 2022, and we will keep you updated on clinical readouts and activity in the coming months. Next year will be the year where, you know, we will know if we have a drug or not. You know, we do believe, I do believe that we do have a drug and it potentially can be a very good drug helping a lot of people. Thank you all again for joining on the call and enjoy the rest of your day. Thank you.
This concludes today's conference. You may disconnect your lines at this time. Thank you very much for your participation.