Not as good as a placebo? Relmada Therapeutics Shares plunge 80% after Phase 3 trial of New Drug for Major Depression fails!

Relmada Therapeutics' experimental drug REL-1017 for major depression failed in a phase 3 clinical trial, sending the company's stock tumbling nearly 80% on Thursday.

In the Phase 3 trial, 232 subjects received REL-1017 over a 28-day period. The study was a failure, with REL-1017 not being as effective as a placebo. Patients' scores on the MONTGOMERY-Asperger's Depression Scale fell by an average of 14.8 points, compared with 13.9 points for placebo. Thus, the placebo response was higher than expected, and the study found placebo to be "significantly better" than REL-1017.

The placebo response was higher than expected, which is indeed a common phenomenon in studies of psychiatric drugs. The company also claimed to have found "contradictory results" at some study sites, with placebo recipients "significantly outperforming" its drug. REL-1017 had a significant effect when the "incredibly high placebo response" point was excluded. However, these findings come from a post-hoc exploratory analysis and do not alter the overall results of the study.

REL-1017 is a novel NMDA receptor channel blocker that preferentially targets GluN1-GluN2D, effectively preventing excess calcium ions from entering neurons, hyperactive channels, and maintaining physiological glutamatergic neurotransmission. May help restore the neuronal circuits critical to mental health. Relmada has built a strong intellectual property protection system around REL-1017, with key patent protection extending into the mid-2030s. Back in August 2022, the FDA granted fast-track approval for the drug as a monotherapy for depression.

The biotechnology company is currently conducting two additional placebo-controlled Phase 3 clinical trials testing REL-1017 as an adjuvant treatment for major depression. According to a recent research note by SVB Securities analyst Mark Goodman, Relmada executives said the positive results from the two trials were "sufficient to file for approval." Most investors, though, are not waiting for results..Relmada shares plunged to about $6.50 in early trading Thursday, down from about $32 at Wednesday's close. REL-1017 blocks the activity of a neurotransmitter called NMDA, which controls mood. The NMDA receptor has long been a target for depression drugs because blocking it directly with drugs, like the effect produced by the drug ketamine, may ease symptoms more quickly than standard treatment..In recent years, this hypothesis has been supported by two approvals. First up is Johnson & Johnson's Spravato nasal spray, which is closely related to ketamine and was approved by US regulators in 2019 ..Last month, Auvelity, made by Axsome Therapeutics, became the first oral NMDA receptor blocker to hit the market.

Relmada's goal, along with REL-1017, is to become the next oral treatment for depression..However, its drug works differently than Spravato and Auvelity..It is an isomer of the opioid addiction treatment methadone and has a different chemical arrangement, meaning it has the same chemical molecular formula but a different atomic arrangement..These differences mean the drug has the potential to produce a fast-acting treatment that avoids the potentially addictive and other associated side effects of methadone and ketamine.

Relmada said there were no opioid or withdrawal effects in its Phase 3 trial, and that the drug showed a statistically significant difference from placebo in just four days of an interim test..The future of REL-1017, however, depends on the outcome of the next two studies. "Despite the disappointing results of the current study for patients, the need for new, safe and effective treatments for major depression remains. We look forward to data from the next two ongoing trials on REL-1017, a potential new therapy as an adjuvant treatment for MDD, "study researcher Maurizio Fava, MD, chief of psychiatry at Massachusetts General Hospital, said in a statement.

According to the World Health Organization (WHO), depression has become the fourth largest disease in the world, with more than 350 million people worldwide suffering from the disease. Depression is the second leading cause of death after cancer and the first cause of disability. According to the Chinese Mental Health Survey, the lifetime prevalence of adult depressive disorder in China is 6.8 percent, of which 3.4 percent are depressive..Currently, 95 million people in China suffer from depression, and about 280,000 commit suicide each year, with 40 percent of them suffering from depression..The global burden of mental disorders worsened in the wake of COVID-19, with major depression and anxiety cases rising by 28 percent and 26 percent, respectively, and depression surging by 53 million cases, or 27.6 percent..The stress of the pandemic has made the diagnosis and treatment of depression even more challenging.

However, many people still have a poor understanding of this mental illness, and patients lack psychological support and related resources..The prevention, diagnosis, and treatment of depression is significantly inadequate compared to the high prevalence of depression..While there are a variety of approved drugs and therapies for depression, there is still a significant need for other novel therapies that are safe, effective, rapid-onset and well-tolerated.

Relmada Therapeutics is a clinical-stage biotechnology company. The Company is engaged in the development of novel pharmaceutical products in chemical entities that address high unmet medical needs in the treatment of central nervous system diseases..The company is focused on the development of drugs for major depression: esmethadone (REL-1017), an N-Methyl-D-aspartic acid (NMDA) receptor antagonist. Its lead product candidate, essemethadone, is an oral agent for the treatment of depression and other potential indications. "Over the past year, we have made significant progress in advancing our lead project REL-1017, and we expect 2022 to be a fruitful year for Relmada," Relmada CEO Sergio Traversa said in an earnings call. Looking ahead, we anticipate multiple key data releases over the remainder of the year as ongoing clinical studies, including RELIANCE, continue to progress..Importantly, the REL-1017 development program continues to be supported by strong funding, which is further strengthened by our oversubscribed follow-on offering that we completed in the fourth quarter of last year."