Reunion Neuroscience Inc. (NASDAQ: REUN | TSX: REUN), a biopharmaceutical company committed to developing innovative and patented therapeutic solutions for underserved mental health conditions, today reported its business update and fiscal second quarter ended September 30, 2022 results.
“Reunion has hit the ground running as an independent company, advancing our mission of developing innovative and patent protected therapeutic solutions for mental health conditions for the hundreds of millions of people with unmet mental health needs. We are well positioned to round out the year in preparation for what promises to be an exciting 2023. I am thrilled to announce that we have dosed all subjects in the first four cohorts of our Phase 1 study with a planned readout set for Q1 2023 and have strengthened our leadership team, appointing seasoned industry professionals in the roles of Chief Financial Officer, Vice President of Medical Affairs, and General Counsel to support our next stage of growth.”
Greg Mayes, President & Chief Executive Officer of Reunion
Key Highlights and Recent Developments
RE104
Reunion is developing its lead clinical-stage drug candidate, RE104, a patent protected novel serotonergic psychedelic designed to deliver quick onset, limited duration psychoactivity and durable antidepressant activity. RE104, the only novel prodrug of 4-OH-DIPT, aims to reduce the treatment burden for patients and payers and provide a safe and effective new therapeutic option for the large population of underserved patients suffering from postpartum depression, and potentially other mental health indications.
Reunion announced the first successful dosings in the RE104 Phase 1 Clinical Study in July 2022, and subsequent to quarter end, completed the dosing of the four prespecified cohorts, representing 32 subjects, for its planned interim analysis to be released in the first calendar quarter of 2023. The study aims to determine the safety, tolerability, pharmacokinetics and pharmacodynamic effects of RE104 over a range of dosage levels. Results of subjective measurements including intensity, duration and feelings produced by the period of acute psychoactivity after administration of RE104 will be used to select an appropriate recommended phase 2 dose (RP2D). Per the Phase 1 protocol, up to two additional dosing cohorts may be evaluated based on pharmacokinetics, pharmacodynamics and safety.
Data generated from the interim analysis will be used to support its planned pre-IND regulatory interactions with the United States Food and Drug Administration (US FDA) in early 2023 where the Company will also present plans for opening an Investigational New Drug (IND) application later in the year for the development of RE104 as a treatment for postpartum depression.
Dr. Nathan Bryson, Chief Scientific Officer, Reunion, commented, “The rapid enrollment of our RE104 Phase 1 clinical study clearly demonstrates significant progress toward our goal of advancing a differentiated molecule which could offer a convenient and effective therapeutic option for patients who suffer from depression and other mental health disorders. We look forward to sharing data from the Phase 1 study in the first quarter of 2023 and laying the groundwork in preparation for our RE104 Phase 2 program.”
RE200 Series
Reunion is also developing the RE200 series. These novel molecules are structurally similar to classical psychedelics, but have selective potency at the target serotonin 2A receptor (5HT2A) and are devoid of 5HT2B receptor agonism. During the second quarter, Reunion progressed in its understanding of some of the structural features that define this class of new chemical entity (NCE) molecules, initiated preclinical work to identify potential drug candidates in the RE200 series and strengthened its patent portfolio. The Company plans to nominate its first lead clinical candidate from the RE200 series in 2023.
In September, the Company appointed Greg Mayes as President and Chief Executive Officer, with Joseph del Moral stepping into the role of Chairman. Mr. Mayes’ initial focus is on the successful completion of the Company’s Phase 1 clinical trial with RE104 and the planned launch of its Phase 2 study in postpartum depression. Mr. Mayes will also progress Reunion’s preclinical RE200 research focused on the discovery of selective and specific serotonergic psychedelics.
Post quarter end, Reunion announced the appointment of Edward Smith as the Company’s Chief Financial Officer, Dr. Aviva Asnis-Alibozek as Vice President, Medical Affairs and Curtis Weber as General Counsel.
Mr. Mayes continued, “Reunion’s strong composition of matter intellectual property significantly differentiates us from other psychedelic therapeutic companies. Making Reunion even more exciting is the Company’s development program, which targets a niche initial indication with high unmet therapeutic need – PPD. We firmly believe that our IP is what distinguishes us, our choice of molecule differentiates us, and our team is what will separate us from the growing number of companies in this space. These factors will continue to generate further interest in Reunion as we seek to build partnerships and expand our clinical pipeline toward the future.”
Corporate Structure and Basis of Presentation
On August 11, 2022, the Company completed its previously announced spinout of its clinics and botanical research operations (Clinic Operations) to Field Trip Health & Wellness with the resulting drug discovery and development business renamed Reunion Neuroscience Inc., which is listed on the NASDAQ Stock Market and Toronto Stock Exchange under the ticker symbol “REUN”.
Reunion accounted for the Clinic Operations as discontinued operations whose assets and liabilities are classified and presented separately as current items held for transfer in the statement of financial position and are measured at their carrying amount. Clinic Operations are excluded from the results of continuing operations and are presented as a single amount as a net loss from discontinued Clinic Operations in the unaudited interim condensed consolidated statements of loss.
For more details on the spinout transaction, please refer to the Key Highlights and Recent Developments – Reorganization and Spinout of Clinic Operations section of the Company’s management’s discussion and analysis, available under the Company’s SEDAR profile at www.sedar.com.
Selected Condensed Consolidated Financial Information
The following table sets forth selected condensed consolidated financial information derived from the Company’s unaudited consolidated financial statements for the fiscal second quarter 2023 ended September 30, 2022, prepared in accordance with IAS 34 in a manner consistent with the Company’s annual audited financial statements, which are reported under International Financial Reporting Standards and in Canadian dollars. The following information should be read in conjunction with the financial statements and management’s discussion and analysis, which are available on the Company’s website at www.reunionneuro.com and under the Company’s SEDAR profile at www.sedar.com.
Overview of operations
The Company incurred general and administrative expenses of $3.7 and $5.9 million for the three and six month periods ended September 30, 2022 compared to $1.9 and $3.3 million for the same periods in 2021. Increases were attributable to increased headcount and other costs associated with the becoming a public Company with increased scale of operations due to the Company entering the clinical stage for its lead asset RE104.
Research and development expenses of $2.2 and $5.1 million were incurred for the three and six month periods ended September 30, 2022 compared to $2.2 and $3.6 million for the same periods in 2021. Increases were attributable to personnel and third-party manufacturing and clinical research costs associated with the ongoing Phase 1 clinical trial for RE104.
Other income and expenses include interest income on the Company’s cash, cash equivalents and investment balances and foreign currency gains primarily attributable to the Company’s United States dollar holdings. The Company also recognized $1.9 and $7.6 million in non-cash charges for the three and six months ended September 30, 2022 in recognition of (i) its financial guarantee of certain lease obligations associated with entities that were part of the spinout of Clinic Operations and (ii) the Company’s equity share of loss and impairment of its investment in Field Trip Health & Wellness, respectively.
The Company recognized a net loss from discontinued operations of $2.2 and $10.4 million for the three and six month periods ended September 30, 2022 compared to $10.5 and $19.6 million for the same periods in 2021. Discontinued operations are attributable to the spinout of Clinic Operations completed on August 11, 2022.
The Company incurred a net loss from continuing operations of $13.9 million or $1.20 per share and $19.2 million or $1.65 per share for the three and six month periods ended September 30, 2022 compared to a loss of $2.5 million or $0.22 per share and $5.9 million or $0.51 per share for the three and six month periods ended September 30, 2021.
At September 30, 2022, the Company held cash, cash equivalents and investments of $36.7 million.
The Company will conduct a conference call and webcast to discuss its results on Monday, November 14, 2022, at 8:30 a.m. ET. To access the call, please dial 1-877-407-9716 (within the U.S.) or 1-201-493-6779 (outside the U.S.) and provide conference ID 13734045. A live webcast of the conference call can be accessed via the Events and Presentations section of the Reunion Investor Relations website here.
For those unable to attend the live call, a telephonic replay will be available until 11:59 p.m. ET on Monday, November 21, 2022. To access the replay dial 1-844-512-2921 (within the U.S.) or 1-412-317-6671 (outside the U.S.) and provide conference ID 13734045. The webcast will be archived and available in the Events and Presentations section of the Reunion Investor Relations website approximately one hour after the conclusion of the live call.
About Reunion Neuroscience Inc
Reunion (formerly, Field Trip Health Ltd.) is committed to developing innovative therapeutic solutions for mental health conditions. The Company’s lead asset, RE104, is a proprietary, novel serotonergic psychedelic compound being developed as a potential fast-acting and durable antidepressant for patients suffering from postpartum depression and other mental health conditions. The U.S. Patent and Trademark Office has granted the Company a patent for the claims related to RE104, granting it exclusive rights to the composition of matter, use and manufacturing of a family of hemi-ester compounds of hydroxytryptamines, including RE104. The patent will provide protection until 2041. Reunion is also developing the RE200 series, which includes compounds with potential for more selective serotonin receptor activity with reduced psychoactivity for potential use in more chronic treatment paradigms and indications.