Minerva Neurosciences, Inc.
Q1 2018 Earnings Call Transcript

Published: 3 May 2018

[Operator:]

Welcome to the Minerva Neurosciences First Quarter 2018 Conference Call. At this time, all participants are in listen-only mod. There will be a question-and-answer session following today’s prepared remarks. This call is being webcast live on the Investors section of Minerva’s website at ir.minervaneurosciences.com. As a reminder, today’s call is being recorded. I would now like to turn the call over to William Boni, Vice President of Investor Relations and Corporate Communications at Minerva. Please proceed.

[William Boni:]

Good morning. A press release with the Company’s first quarter 2018 financial results became available at 7

[Dr. Remy Luthringer:]

Thank you, Bill, and good morning, everyone. Thanks for joining us today. With the recent initiation of our Phase 2b trial is MIN-117, Minerva has now moving the three programs into late-stage development. So most advanced program is MIN-101, now called roluperidone for the treatment of negative symptoms in schizophrenia which remains a significant unmet medical need. At the end of last year, we initiated a pivotal Phase 3 trial with roluperidone. We have prioritized the initiation of US sites, and I am pleased to report that they have been actively enrolling patients during the first quarter. More recently a number of European sites have been initiated. Approximately 500 patients will be enrolled at approximately 60 clinical sites into US and Europe with about 30% of patients coming from the US. We expect to have the top-line results from the trial in the first half of 2019. As discussed during our recent key opinion leader event in New York, a recent survey of psychiatrists ranked [ph] negative symptoms as a principal unmet medical need for patients suffering from schizophrenia. Roluperidone is under development to be the first drug approved to target these symptoms in this patient population. Negative symptoms stay with the majority of schizophrenia patients for life. These symptoms severely limit the ability to lead productive lives and result in an emotional burden to themselves and their families as well as a significant economic burden to society. In contrast, positive symptoms which are the main focus of currently available treatments are episodic, represent only intermittently in patients with schizophrenia. Currently approved therapies for positive symptoms [indiscernible] have therapeutic effect primarily by blocking the dopamine transmission. So, blockade of the dopamine system in the brain reduces not only side effects such weight gain, sedation, extrapyramidal symptoms and prolactin increase but often increases the burden of negative symptoms. So, Phase 3 trial builds upon the results of our Phase 2b trial which showed the statistically significant reduction in negative symptoms and in parallel improvement in multiple additional outcome measures. Consequently, the design of the Phase 3 trial aims to virtually replicate the findings of our successful Phase 2b trial. The Phase 3 trial is a randomized double-blind parallel-group placebo-controlled 12-week study to evaluate the efficacy and safety of 32 milligrams and 64 milligrams of roluperidone in adult patients. So, 12-week treatment period is followed by a 14-week open-label extension period during which patients on drug during the double-blind phase will continue receiving their original dose. Patients on placebo will be randomized to receive either 32 milligrams or 64 milligrams of active drug. The primary end point is a change from baseline in negative symptoms using the positive and negative syndrome scale and Marder’s negative symptoms factor score NSFS over the 12-week double-blind treatment period. Moving on to MIN-117, we announced the initiation of a Phase 2b trial in MDD in early April. The primary objective of the trial is to evaluate the efficacy of two fixed doses of MIN-117, 5 milligram and 2.5 milligram compared with placebo in reducing the symptoms of depressed mood as measured by the change in the Montgomery-Asberg Depression Rating Scale total score over six-week treatment period. Secondary objectives include assessment of the change from baseline symptoms of anxiety using the Hamilton Anxiety Scale. The change in severity of illnesses using the clinically global impression of serveries scale and clinical global impression of improvements scale and safety of a six weeks of treatment. Approximately 324 patients are expected to be enrolled in this trial at around 40 sites in the U.S. and Europe. So, study design includes a screening phase, a six-week double-blind treatment phase and the two-week post-study follow up period. Top line results are expected in the first half of 2019. The study population will consist of adults with the diagnosis of moderate or severe entity results MDD features and with at least moderate levels of anxiety. We believe that patients suffering from depressed mood who also have some symptoms of anxiety that benefits from treatment with MIN-117 as observed in previous Phase 2a clinical findings and based on the pharmacologic profile of the molecule. While existing therapies for MDD are available, meta-analysis show that their therapeutic effectiveness is limited and does not benefit all patients with the diagnosis of depression. Furthermore, due to side effects, particularly cognitive impairment and sexual dysfunction existing therapies are often discontinued prematurely by patients. For these reasons in addition to the primary effect on mood observed in our previous trial we plan to carefully assess anxiety, cognition, sexual function, sleep and onset of action to further define the product profile of MIN-117 as an adjunct potentially address these shortcomings. We believe these findings may also help us design a data driven Phase 3 development plan. Seltorexant, also known as MIN-202 is a third late stage clinical product and the development with Janssen Pharmaceutica for the treatment of insomnia disorder and MDD. Seltorexant is a selective orexin-2 receptor antagonist. [indiscernible] in the brain is known to be involved in the control of several key functions including metabolism and vigilance. Prior research as well as previous data generated with this molecule shows that the orexin-2 sub-receptor is the most specific pathway involved in the control of the sleep weight cycle and thus maybe a significant target to improve insomnia, depression and mood symptoms. 3 Phase 2b clinical trials have been initiated with seltorexant to expand upon earlier clinical data on both indications. Two of these trials are in MDD and one is in insomnia disorder. In the first MDD trial approximately 280 patients are planned to be enrolled at clinical sites in the U.S. Europe, and Japan. In the second MDD trial approximately 100 patients are planned to be randomized at clinical sites in the U.S. The insomnia trial is expected to enroll a total of approximately 360 patients at clinical sites in the U.S., Europe and Japan. These trials are planned for completion in 2019. For MIN-301 our preclinical candidates studies are ongoing to allow this molecule to enter clinical development. In addition to these studies MIN-301 has already been [tested at] Parkinson’s disease animal models. We currently continue to explore indications in the space of additional neurodegenerative disorders. In summary, 2018 is a year of diligent execution of all of our clinical trials in order to ensure that we give ourselves and our patients as the best chance of success in 2019. In parallel, we continue to conduct market research to determine the market potential of our molecules particularly roluperidone. We are also moving forward on preparatory work for the finding of a new drug application NDA for roluperidone in anticipation of a positive Phase 3 study and on the launch strategy for this molecule. I would now like to turn the call over to Geoff.

[Geoff Race:]

Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter ended March 31, 2018. A more detailed discussion of our results may be found in our quarterly report on Form 10-Q filed with the SEC earlier today. Cash, cash equivalents, restricted cash and marketable securities as of March 31, 2018 were approximately $121.1 million. The company believes that its existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months from today and into early 2020 based on our current operating plan. The assumptions upon which this estimate is based are routinely evaluated and maybe subject to change. Research and development expenses were $8.4 million in the first quarter of 2018 compared to $7.6 million in the first quarter of 2017. The increase in R&D expenses primarily reflects higher development expenses for the Phase 3 clinical trial of roluperidone and the Phase 2b clinical trial of MIN-117. These amounts were partially offset by lower development expenses for the seltorexant program due to the amendment to the Company’s Co-Development and License Agreement with Janssen. We expect research and development expenses to increase during 2018 as we increase patient enrollment and related support activities for the roluperidone and MIN-117 trials. General and administrative expenses were $4.3 million in the first quarter of 2018 compared to $2.9 million in the first quarter of 2017. This increase in G&A expenses was primarily due to an increase in non-cash stock-based compensation expense and salary costs from increased staffing to support our pre-commercial activities. We expect general and administrative expenses to increase during 2018 as we begin to invest in the infrastructure necessary to support the Company’s growth. Net loss was $12.4 million for the first quarter of 2018 or a loss per share of $0.32 basic and diluted, compared to a net loss of $10.6 million for the first quarter of 2017 or a loss per share of $0.30 basic and diluted. Now I would like to turn the call back to the operator for any questions.

[Operator:]

[Operator Instructions]. Our first question comes from the line of Jason Butler of JMP Securities. Your line is now open.

[Unidentified Analyst:]

Hey, it’s [Will] in for Jason. Thanks for taking the questions. I guess my first question is Remy you mentioned some of the market research that you are doing for roluperidone and I know some of that was presented at the recent event. Just wondering if you could discuss in a bit more detail your current thoughts on the market opportunity and if you expect that to evolve or it is evolving at all? Thanks.

[Dr. Remy Luthringer:]

Thank you, Remy speaking here. I think I will give this to Rick, who is also on the call and he can give you a little bit more granularity on all this. So very important question and it's something we have really contemplated very carefully currently. So, Rick please.

[Rick Russel:]

Yeah, thank you Remi and good morning. So, at the [indiscernible] we mentioned what we think is very significant population that experiences negative symptoms who are clinically stable with positive symptoms or just to take you back to some of those numbers, we know there is about 1.4 million patients in the U.S. that are diagnosed and treated and almost 750,000 or almost of them are clinically stable and have persistent or predominant negative symptoms and what was interesting is in terms of advancing our assessment of the commercial opportunity, we recently surveyed 150 psychiatrists in the U.S. these are prescribers that see patients with schizophrenia and what they are telling us is that that population that [confirmed] that population exists, that there is a high unmet need are looking for therapies to treat these patients and when exposed to the clinical data that we generated thus far that we’re planning replicate in the Phase 3, they are really hitting, they are likely to use while we [indiscernible] in that patient population, so that is a of course very exciting for us.

[Unidentified Analyst:]

Okay, great. And it’s kind of an out of the box question, I guess, but Phase 2 for MIN-117 is expected to be on the first half in next year maybe the same time as the 202 trials. Any potential for synergies both those agents are successful MDD?

[Dr. Remy Luthringer:]

So, it is obviously a great question. But I think as you know mood disorders is a very I have to say heterogeneous population, so it is definitely the symptoms the clinician will see and the symptoms the patient is suffering from are very similar, but you have really different population and without going into too much details you have definitely depressions where people are reacting to life events, stress at work, stress in the family and so this is I think a population who is responding quite well to existing therapies, afterwards you have a part of the population who are partial responders. And they are really not really responding well and they are not going to back to normal mood, when they are treated with the current therapies and at the end of the day you also really what we call the resistant patients, where probably and this was called under [indiscernible] depression before we went to DSM and we call this MDD. So just to say that you have different types of patients suffering from depression with probably a different biological background and which is important would need a different treatment. So all this say that I think the idea with 202, with seltorexant is really to go after the patients who are not responding well to the existing therapies to so partial responder this and as you know obviously sleep is an important component of depression but as you know also what we have seen with this molecule is that we have not only an improvement of insomnia or sleep, or the sleep wake cycle in these patients but due to the mechanism of action of this molecule, we have also in effect which is really a direct effect on mood. So, the rationale to go to these kinds of population is really important and as you know the current treatment, are what we call enhancement therapies where you’re going with an existing anti-depressant and we gave low doses of anti-psychotics with all the potential side effects. So really this is really the sweet spot of 202. Speaking about 117 I think I this molecule has such a unique pharmacology that you can think about a lot of potential sweet spot in the space of mood disorders. And what is clear is that I think 117 is very effective antidepressant in the Phase 2a we have seen that even compare to standard-of-care, we have better -- full response rate with 117. So, you can really think that the MIN-117 is a molecule which can address even patients who are not responding at all to any other therapy. And last but not least, in this population, you have a lot of anxiety and we have also seen an effect on anxiety, so you are really covering this population suffering from anxiety and mood disorder. And last but not least, if you think that here you have to deal with the chronic treatment and you need an extremely well tolerated molecule whereas the effect on cognition and sexual function is really not there, or even that you an improvement of this dimensions. And again, we have a very good data to show that 117 is definitely doing something positive in this different area. So, I think really there is still a huge unmet medical need in mood disorders, different types of unmet medical needs and basically 117 and 202 are really covering two very important part of the population who are currently not treated at all with existing therapies. Sorry it was a long answer but I think it’s important and thank you for asking this question because it’s really important to understand that we are -- we have really, really still a lot of unmet medical need in the space of depression.

[Operator:]

[Operator Instructions]. Our next question comes from the line of Joel Beatty of Citi. Your line is now open.

[Joel Beatty:]

Hi, good morning. And thanks for taking the questions. The first one is -- and maybe it’s a little bit too early to address this. Do you have -- could you discuss for the five [audio gap] to the ‘19, what the timing could be in a sense of -- do you anticipate there are certain trials that would read out earlier than others?

[Dr. Remy Luthringer:]

So, Joel, sorry, you broke up for whatever, five seconds. So, can you just repeat what was your question? I understood 2019 but I did not get the beginning.

[Joel Beatty:]

Yes, sorry about that. So, with the five trials reading out in 2019, do you anticipate that certain trials will read out before others?

[Dr. Remy Luthringer:]

So, this is obviously an interesting question and honestly difficult to answer at this stage. What I can say today is that all the five trials currently going on are moving according to plan. And I think we should keep the guidance that the read out will be in the first half of 2019. We say that indeed obviously some trials will read out earlier than the other ones but I think we should keep this guidance. But I think the message here is things are going well, patients are entering the study and I think we are on target in terms of timing.

[Joel Beatty:]

Great. And then maybe a slightly different question is, I’ve seen in the press release roluperidone and 117 are guided to have results in the first half of 2019 but seltorexant is guided to have results -- [as I’ve heard], in 2019. So, should we assume that seltorexant data is likely to come towards the end of 2019 or is it possible that the read outs from those three seltorexant trials could also come in the first half.

[Dr. Remy Luthringer:]

I would not read this in the same way as you are reading it, I think we are just taking our precaution in order not to be disappoint anybody but again the studies are definitely on time. So, on a peer Joel, I cannot give you more granularity. We are doing our homework, we are really very close to the investigators and to the teams around the investigators in order to have them focused on our trials. Again, in some trials the things are going even better than expected, but I think I would not give more guidance at this stage, you have to give us a little bit time to move forward with all these trials.

[Joel Beatty:]

Got it, it makes sense. And then would you guys take cash obviously with five trials underway, expenses are increasing. How do you think about expenses ramping up over the course of this year, or perhaps how long cash lasts?

[Geoff Race:]

Yeah, let me take that one Joel, its Geoffrey, thank you for the question. So, as we guided in the call, we expect cash to last us into 2020. Of course, we have five fairly big studies running, but of course three of them are currently financed by Janssen in accordance with the amendment of the co-development and co-commercialization agreement that we penned with them with last year. So, obviously the role of [paradigm] study is a big study, the 117 is also moving ahead and cash burn will of course be correlated to the speed at which we recruit those studies. But clearly over the last couple of years we’ve spent around about $30 million per year on our clinical programs and obviously that rate is now increasing as you can see from the cash burn rate in the first quarter of this year.

[Joel Beatty:]

Thanks, and then one last question. I think clearly there’s been a lot of companies that have had interest in negative symptoms with schizophrenia in the past and those drugs have all [sell to-date]. One of the things that’s unique about your program is that it’s a monotherapy trial whereas typically the trials in the past has been addon therapies. Could you discuss the importance of the distinction?

[Dr. Remy Luthringer:]

This is a great question and I am really happy that you asked this question. So, I think there are two aspects here, first of all and as Rick mentioned, there is definitely a population out there which is a significant part of the population of patients with schizophrenia who do not need any anti-psychotic but need a treatment to improve negative symptoms, cognition and in order to allow them to function well, so this is definitely a population out there. There is a population obviously who has some positive flairs and positive episodes of agitation and here you need obviously a treatment which is helping them to come down if you allow me this work from this positive episode. All these said, I mean if you want to get the approval of a drug for negative symptoms showing a specific effect on negative symptoms you have to design the right trial. So, this is a different aspect, this is not speaking about any population at the end of the day which is treated with a drug but I mean about getting the claim of a specific effect on negative symptoms and here it is interesting that I think no KOLs. I think also that the agencies at the EMA agree that the only way to demonstrate that you have a specific effect on negative symptoms is to do this in monotherapy. And second, we need to have as a controlled placebo why, first of all there is no approved drug for negative symptoms which obviously is making quite impossible to have a positive comparator. And second, I think in order to claim that you have a specific effect on negative symptoms you need to have a safe way to control which is not modifying confounding factors like positive symptoms like [EPS] and as you know when you go with an antipsychotic you have all these side effects which by the way are picked up by the PI and at the end of the day you are advising your trial. But I mean you can only do the trial versus placebo in order to demonstrate that you have a specific effect with the drug. So, this is all what we have done in the Phase 2b and obviously the results you know and this is the reason why I think we got the blessing to do the same in the Phase 3. And based on these two trials which are really powered in order to be registration of trials, I think we will be at a stage where we can file an NDA. So, I think there are two aspects, patient populations and at the end of the day the way we’re developing drug in order to get the approval of specific effect on negative symptom.

[Operator:]

Thank you. And I am showing no further questions at this time. I will return the call back over to Remy Luthringer for any closing remarks.

[Dr. Remy Luthringer:]

So, thank you so much for being with us today and I am really looking forward to update you in very short future. Thank you again.

[Operator:]

So, ladies and gentlemen, thank you for participating in today’s conference. It does conclude today’s program. You may all disconnect. Everyone have a great day.