Minerva Neurosciences, Inc.
Q3 2016 Earnings Call Transcript

Published: 3 Nov 2016

[Operator:]

Welcome to the Minerva Neurosciences third quarter 2016 conference call. At this time, all participants are in a listen-only mode. 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, Investor Relations and Corporate Communications at Minerva.

[William Boni:]

Good morning. The press release with the company's third quarter financial results became available at 7

[Remy Luthringer:]

Thank you, Bill. And good morning, everyone. Thank you for joining us today. Today, I will focus primarily on the positive clinical data from the six-month extension of our Phase IIb trial with MIN-101 carried out in patients with negative symptoms of schizophrenia. These data were announced just last week and marked an important milestone of our compound for patients suffering from schizophrenia and other disorders with debilitating negative symptoms and for Minerva Neurosciences and its shareholders. I will also discuss the next planned steps in the development plan for MIN-101. Know that we have this newest data in hand, allowing us to prepare for Phase III. Finally, I will touch upon our other molecules – MIN-117 for major depressive disorders, MDD; MIN-202 for insomnia and MDD; and MIN-301 for Parkinson’s disease. Turning to MIN-101, on October 25, we announced positive findings from the six-month extension of our Phase IIb trial of MIN-101 monotherapy in schizophrenic patients suffering from negative symptoms that severely impair the everyday functioning. Extension phase was a 24-week open label period that followed the 12-week randomized, double-blind, placebo-controlled core phase of the trial. Results from the core phase were announced last May. They showed that the trial met its primary endpoint, with statistically significant improvement in negative symptoms as measured by the pentagonal structure model, PSM. Statistical significance was also achieved in multiple secondary endpoints that included overall general psychopathology, cognition and overall functioning. Data generated during the open label extension were intended to provide supportive evidence of efficacy maintenance and/or further improvement when treating patients over a long period of time. In addition to the assessment of efficacy, this extension phase was intended to further confirm the safety and tolerability of the drug after several months of administration. Today, we are pleased and excited to discuss this new extension phase data. These data demonstrate a further and continuous improvement in negative symptoms as measured by the negative symptoms subscale of the positive and negative syndromes scale, PANSS. The clear take-home message from this new data is that the longer patients are on monotherapy with MIN-101, the greater improvement they are observed to experience in their negative symptoms during the entire extension period, without evidence of reaching a plateau after nine months of MIN-101 administration. We believe that such continuous improvement in symptoms over a nine-months period in this patient population is unprecedented. The data also provide an extended safety profile for MIN-101, consistent with that observed during the core double-blind phase of the trial. MIN-101 was reported to be well-tolerated at both doses, 32 mg and 64 mg, over the entire 36-week duration of the study. Importantly, positive symptoms remained stable through the extension period as measured by the PANSS positive symptom subscale score. Improvements in overall schizophrenic psychopathology were also observed as measured by the PANSS general psychopathology subscale and the total PANSS score. All of these concomitant effects of MIN-101 monotherapy in addition to its effect on negative symptoms and its good safety and tolerability profile suggests that MIN-101 has the potential to address the unmet needs of schizophrenic patients. I would now like to review specific data points. Patients who completed the core phase were provided the opportunity to enter into a 24-week open label extension phase. During the extension phase, all patients received either 32 mg or 64 mg of MIN-101. Placebo patients in the core study were randomized to one of these two doses. 142 patients from the treatment and placebo groups in the core phase and of the extension phase with 88 patients completing the extension. 70 patients received 32 mg and 72 patients received 64 mg during the extension. As I mentioned, negative symptoms assessed based on the PANSS PSM are observed to continue to improve during the extension phase with a reduction from the study start for the 32 and 64 mg treated groups of 5.5 points and 4.9 points respectively. This reduction is confirmed by a reduction of 5.4 points and 5.3 points respectively when the PANSS negative score is calculated using the three factors negative symptoms subscale. Positive symptoms were observed to remain stable throughout the study. General psychopathology was observed to improve during the extension phase for the 32 and 64 mg groups as shown by reductions in the PANSS general psychopathology subscale score. MIN-101 was generally reported to be well-tolerated throughout the entire 36-week period. QTcF, a measurement of cardiac function, was closely monitored throughout the study. This continuation criteria based on QTcF prolongation were incorporated in the protocol. As previously announced, two patients out of 162 will receive MIN-101 in the core phase, what is continued based upon these criteria. All of these patients received the higher dose, 64 mg. In the extension phase, no additional patients were discontinued. Extension data also confirm that MIN-101 at the doses tested did not have an effect on extra-pyramidal symptoms, EPS, prolactin levels and weight. Taken together, these results I have summarized further confirm that the effect of MIN-101 on negative symptoms is a direct and specific effect. Combined with a statistically significant data from the randomized, double-blind, placebo-controlled, 12-week core phase, the extension data paves the way towards Phase III testing of MIN-101 as a novel differentiated treatment for the large worldwide population of schizophrenic patients with negative symptoms. The symptoms represent the most significant unmet need for these patients and thus contribute substantially to the poor quality of life and functional outcomes. With this data in hand, we intend to meet with the US FDA to determine the late-stage clinical strategy and, more specifically, the design of the next clinical trials with MIN-101. As we speak, our team is working on the preparatory work for late-stage development. In terms of CMC, scale-up is ongoing. And in terms of clean pharm [ph] several studies have been initiated or are ready to be initiated soon. Our objective is to initiate efficacy trials in mid-2017. We look forward to finalizing our plans for the clinical advancement of MIN-101 pending discussions with regulatory authority. Finally, we have submitted for publication in a peer-reviewed journal the results obtained in the double-blind core phase. We will also present several posters at the American College of Neuropsychopharmacology, ACNP, annual meeting in early December. During this meeting, we will detail additional analysis we have performed on core phase data. One of our abstracts will be featured in an oral presentation of data from the core phase of the MIN-101 trial at this prestigious conference. Moving to mean MIN-117. MIN-117 is Minerva’s compound for the treatment of MDD. Earlier this year, we announced positive data from a Phase IIa trial in Europe in this indication with this compound. In September, we announced that the FDA has accepted the company's Investigational New Drug application for MIN-117. FDA acceptance of the IND allows us to begin clinical trials with this compound in the US, building upon the results of the Phase IIa trial. We are evaluating the next steps in the development of MIN-117 as a treatment for MDD based on its potential differentiation from existing therapies. These include the potential of early onset, efficacy of symptoms of both MDD and anxiety, lack of impairment in cognition and sexual function, and preservation of sleep architecture and continuity. These attributes may also pave the way to test MIN-117 in other indications with unmet needs. For example, generalized anxiety disorders, GAD. The late-stage development strategy of MIN-117 is currently being finalized and will be presented soon. Turning to MIN-202. Our third clinical stage product is MIN-202, a selective orexin-2 receptor antagonist and the co-development with Janssen Pharmaceutica NV. Janssen and Minerva are conducting a number of supportive activities in anticipation of the next phase of clinical trials in insomnia disorder and major depressive disorder, which are anticipated to begin in early 2017. And finally, MIN-301. MIN-301 is our preclinical product candidate, a peptide, which targets the extracellular domain of neuregulin-1 beta-1 activating ErbB4. MIN-301 is under development as a treatment for Parkinson's disease. We are pursuing the next planned steps in this program, which includes the filing of an Investigational New Drug application in the US or an Investigational Medicinal Product Dossier in Europe and pending acceptance by regulatory authorities, the initiation of Phase I clinical testing thereafter. In summary, the extension data I have reviewed solidify what was already a strong foundation for proceeding into Phase III trials with MIN-101. We view the continuous improvement in negative symptoms over a nine-month period as potentially transformational for schizophrenic patients suffering from these extremely debilitating symptoms. In the coming months, we plan to meet with regulatory authorities prior to finalizing our plans Phase III. I would now like to turn the call over to Jeff to cover our financial results.

[Geoff Race:]

Thank you, Remy. We issued a press release earlier this morning, summarizing our operating results for the third quarter ended September 30, 2016. A more detailed discussion of our results may be found in our quarterly report on Form 10-Q filed earlier today. At September 30, 2016, the company's cash, cash equivalents and marketable securities were approximately $91.9 million compared to $32.2 million as of December 31, 2015. As we stated on the last quarterly call, we expect that our financial resources will be sufficient to fund operations into 2018. Research and development expenses were $5.9 million in the third quarter of 2016 compared to $3.8 million in the third quarter of 2015. For the nine months ended September 30, 2016, R&D expenses were $13.9 million compared to $12.3 million for the nine months ended September 30, 2015. Excluding stock-based compensation, total R&D expense related to drug development programs for the three months ended September 30, 2016 and 2015 was $5.6 million and $3.6 million respectively, an increase of $2 million. This increase in R&D expenses primarily reflects higher development expenses under the MIN-202 program for Phase II clinical trial preparation, partially offset by lower costs for our MIN-101 and MIN-117 programs as both clinical trials have concluded. Excluding stock-based compensation, total R&D expense related to drug development programs for the nine months ended September 30, 2016 and 2015 was $13.2 million and $11.9 million, respectively, an increase of $1.3 million. This increase in R&D expenses primarily reflect higher development expenses under the MIN-202 program for Phase II clinical trial preparation. Increased expenses related to our Phase IIa clinical trial of MIN-117 and increased expenses related to our MIN-301 development. This was partially offset by decreased expenses due to the completion of our Phase IIb clinical trial of MIN-101. General and administrative expenses were $2.4 million in the third quarter of 2016 compared to $1.9 million in the third quarter of 2015. For the nine months ended September 30, 2016, G&A expenses were $7 million compared to $5.6 million for the same period in 2015. G&A expense in the three months ended September 30, 2016 and 2015 included non-cash stock-based compensation expenses of $0.7 million and $0.4 million respectively. Excluding stock-based compensation, G&A expense for the three months ended September 30, 2016 and 2015 was $1.7 million and $1.5 million, respectively. This increase was primarily due to an increase in professional fees during the three months ended September 30, 2016. G&A expense in the nine months ended September 30, 2016 and 2015 included non-cash stock-based compensation expenses of $1.8 million and $1.1 million, respectively. Excluding stock-based compensation, G&A expense for the nine months ended September 30, 2016 and 2015 was $5.2 million and $4.5 million respectively. This increase was primarily due to an increase in personnel costs and professional fees during the nine months ended September 30, 2016. Net loss was $8.4 million for the third quarter of 2016 or a loss per share of $0.24 basic and diluted as compared to a net loss of $5.9 million or a loss per share of $0.24 basic and diluted for the third quarter of 2015. Net loss was $21.6 million for the first nine months of 2016 or a loss per share of $0.71 basic and diluted as compared to a net loss of $18.6 million or a loss per share of $0.81 basic and diluted for the first nine months of 2015. Now, I’d like to turn the call over to the operator for any questions. Operator?

[Operator:]

Thank you. [Operator Instructions] Our first question is from Jason Butler with JMP Securities. You may begin.

[Jason Butler:]

Hi. Thanks for taking the questions. And congrats on the positive data for 101. Remy, just first question, as you’re thinking about moving forward into the next study, Phase III program for 101, are you focused on both doses that you looked at in Phase II or is there – or would you only focus on one dose for Phase III?

[Remy Luthringer:]

Thank you, Jason. Clearly, we're focusing on moving forward those two doses, knowing that the pivotal dose is probably 32 mg. But we are really focusing on moving forward with two doses because – in a Phase III program, you have minimum to test two doses, so we’re focusing on the two here.

[Jason Butler:]

Okay, great. And then when you – again, thinking about the Phase III trial design, can you maybe put into for us the trial or the data we saw for Vraylar earlier this year in negative symptoms and the benefit there and how you think about the trial design relative to that trial in terms of duration, patient population and endpoints?

[Remy Luthringer:]

So, I think if you allow me a comment, we have, first of all, to see if the results obtained are specifically effects on negative symptoms or not. So, I think the only way to show that you have specific effects on negative symptoms is a trial where you have to compare your molecule to placebo because if you’re comparing your molecule to another molecule inducing some side effects like EPS or having an impact on the other symptoms outside negative symptoms, you cannot come to the conclusion that this is a specific effect. So, what we're planning to do is ready to move forward again to test our molecule at the different doses we are planning to use versus placebo. The duration is, at minimum, three months, double-blind phase. We're planning to have an extension – or to propose an extension to the patients, which will go up to 12 months. But, clearly, we will test our molecule versus placebo. In terms of endpoints, we still will stay with the PANSS negative score. We are currently evaluating the different ways to calculate the negative score. That is, obviously, the standard way which is coming out from the three factors. But we know very well that for these seven items constitute a negative score. Two are definitely are not describing negative symptoms. This is the reason why we went with the Pentagonal model from White. But there is also the Pentagonal model from Steve Marder [ph], which is another way to evaluate the negative symptoms. And so, as we speak, we are really working on this [indiscernible] analysis in order to select the best endpoint. But, definitely, it will come out from the PANSS.

[Jason Butler:]

Okay, great. And then just last question on MIN-202, can you just talk about the partnership with Janssen and the cost responsibilities for the next studies, if they’ve been determined yet?

[Geoff Race:]

Morning, Jason. This is Geoff. So, we're in the process of designing the next stage of this program. As you know, in the development agreement, there are two stages of development. There’s an initial stage, which we’ve now passed. We passed that in July of this year. And we’re now into the second stage. Minerva’s expenses are capped at $19 million through to the end of a Phase IIb study in the second stage. Now, which company will do each study is currently being discussed and organized. So, the exact allocation of responsibility and cost in the program is not yet finalized. But what we do know is that we won’t be paying any more than $19 million.

[Jason Butler:]

Okay, great. Thanks for taking the questions. And again, congrats on the 101 data.

[Geoff Race:]

Thanks, Jason.

[Remy Luthringer:]

Thank you.

[Operator:]

Thank you. [Operator Instructions] I'm showing no further questions at this time. I’d like to turn the call back over to Remy Luthringer for closing remarks.

[Remy Luthringer:]

Thank you, everybody, to have joined the call today and really looking forward to update you on Minerva in the future. Thank you again.

[Operator:]

Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect. Everyone, have a great day.