Minerva Neurosciences, Inc.
Q4 2016 Earnings Call Transcript

Published: 13 Mar 2017

[Operator:]

Welcome to the Minerva Neurosciences Year-End 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. Please proceed.

[William Boni:]

Good morning. A press release with the company's fourth quarter and year-end 2016 financial results became available at 7

[Remy Luthringer:]

Thank you, Bill, and good morning, everyone. Thank you for joining us today. 2016 was a pivotal year for Minerva as a public company. During the year, we reported five data read-outs for our three clinical stage product candidates. This include MIN-101 for negative symptoms in patients suffering from schizophrenia, MIN-202 for insomnia disorder and for the adjunctive treatment of major depressive disorder MDD and MIN-117 for MDD. This data laid a solid foundation for the future development of our compounds and thus reflect significant progress along the respective clinical development pathways for these products. More importantly they inform our decisions regarding the nature of advanced stage clinical testing, we plan to initiate in 2017. Today, I would like to take both a look-back on the last year’s achievements and to look forward for this year’s objectives. In the second quarter of 2016, we announced that our Phase 2b trial evaluating MIN-101 in monotherapy with daily doses of 32 milligram and 64 milligram compared to placebo achieved its primary endpoint, which was improvement in negative symptoms. Of note, improvements were also observe [ph] the numerous pre-defined secondary and exploratory endpoints including total PANSS score and cognition. The observed improvements shared the same time course beginning to differentiate from placebo as early as two weeks after treatment initiation and continuing over the 12 week double-blind period. Very importantly, treatment with MIN-101 helped keep positive symptoms tabled over the complete treatment period without observed side effects such as sedation or motor effects. To the best of my knowledge, MIN-101 is a first treatment for schizophrenia with a specific effect on negative symptoms, such raising the possibility that it might be the first treatment to address the significant unmet medical need in patients suffering from this disease. Later in the year, we announced data from the six months expansion phase of the trial in which we observed further and continuous improvements in these symptoms. In other words, the longer patients were treated with MIN-101, the greater improvement was observed in the negative symptoms during the entire expansion period. Result evidence of reaching a plateau. Importantly, positive symptoms remained stable over the extension period. MIN-101 was observed to be well tolerated throughout the entire 36 week period of the trial. No weight gain, no sedation, no extra-pyramidal symptoms EPS, no [apetizia], and no productive increase were reported during the study. Two patients who received 64 milligram a day were discontinued based upon pre-specified QTC criteria. Later when this trial was presented at the American Society of Neuropsychopharmacology, ACNP annual meeting last December highlighted by a hot topic over session. In addition to the overall presentation, several process were presented, one included a sub-analysis of negative symptoms by age, with a strongest effect size observed in the youngest patients in the trial. Two additional processes were presented, one focusing on the effects of MIN-101 on cognition and one on sleep. Cognition observations measured by the batch scale included significant improvements in motor functions, verbal fluency and working memory following treatment with MIN-101 compared to placebo. For the somnography measurements included observed improvement in time to fall asleep and deep sleep, as well as restoration of the number of sleep cycles. The sleep parameters are typically disturbed in patients suffering from schizophrenia. Based on these outcomes, we are planning to move into Phase 3 with trials expected to be initiated in the second half of this year after we obtained input from both the FDA and EMA. In end of Phase II meeting with the FDA has not been scheduled to take place early in the second quarter of this year. We plan to schedule a scientific advisory meeting thereafter with the European Medicines Agency, EMA. The main objective of this meeting is to share with the agencies our overall Phase 3 and 4 development plans and to seek guidance about the Phase 3 clinical program, particularly is a target patient population and the primary and secondary end points. We will also seek input in terms of the CMC scale-up program, as well as our technical and clinical pharmacologic program, which we’ll run in parallel with the pivotal efficacy trials. During the first quarter of 2016, we reported positive data from two trials with MIN-202 also known as JNJ42847922. This compound is a Selective Orexin 2 antagonist under co-development with the Jannsen Pharmaceutical. So clinical studies with MIN-202 included a Phase IIA trial in patients suffering from insomnia without associated neuropsychiatric disorders and the Phase 1B trial in MDD patients. Data from the Insomnia trial indicates that MIN-202 improved significant sleep induction; restore sleep duration and preserves key phases sleep particularly deep sleep, thus enabling restorative sleep. Additional significant positive efficacy signals were observed for key secondary endpoints. Results from the trials in patients with MDD included consistently creative improvements in depressive symptomatology observed in patients who received MIN-202 compared to those who received placebo or diphenhydramine, a positive control. Depressive symptoms were also observed to significantly improving patients treated with MIN-202 independent from its effects on sleep. At the ACNP meeting in December, data were presented indicating that inhibition of Orexin 2 receptors decreased its stress induced activation of the HBA axis supporting the role of this receptor in modulating response to threats. Researchers noted that Orexin 2 antagonist may therefore be valuable in the treatment of stress induced disorders. These finding suggest that MIN-202 may be a treatment of choice for insomnia and depression to diseases with dis-regulated stress levels. Data from a third trial with MIN-202 became available early in the year as well. In this Phase 1 trial, single dose morning administrations of MIN-202 was observed to be well tolerated in healthy Japanese adult male study participants. Pharmacokinetic features were comparable to those observed in previous studies carried out in healthy non-Asian study participants and thus paves a way for worldwide development of MIN-202. Reported activities and clinical pharmacology studies are currently being carried out in anticipation of the next phases of clinical development which is compound in insomnia and MDD. Our third clinical stage compound is MIN-117 in development to address unmet medical needs in patients suffering from depressive disorders. We announced positive topline results from a Phase 2A clinical trial with MIN-117 in May 2016. This data was subsequently presented at the ACNP annual meeting in December. The goal of this study was to establish prospectively signal detection and to assess effect sizes in order to power [consolatory] trials and to defy specific attributes of the molecules. We observed the dose dependent superiority of both doses of MIN-117 versus placebo in this trial in reducing depressive symptomatology paving the way towards the next stage of development. In further data analysis 24% of patients treated with the higher dose passing 2.5 milligrams per day were observed to achieve remission of depressive symptoms. The higher dose was also observed to improve cognitive impairment which is a major burden for patients suffering from depression. In addition, improvement in anxiety as measured by the Hamilton anxiety rating scale were observed with both doses MIN-117 tested. This efficacy outcome were observed in a context in which both those tests demonstrated favorable to our ability profile. Thus the incidence and type of side effects did not differ significantly between MIN-117 and placebo. No unexpected adverse events were reported and treatment with MIN-117 was not associated with sexual dysfunction, suicidal ideation or weight gain. Pharmacodynamics measurement based on sleep recording showed that MIN-117 preserved sleep continuity and architecture and therefore is not expected to have related detrimental effect on sleep. In September 2016, we announced that the FDA accepted our IND for MIN-117, allowing us to begin clinical trials with its compound in the US. Planning is underway for these trials, which are expected to begin in late 2017. Finally, our pre-clinical stage product candidate is MIN-301 to treat Parkinson’s disease. MIN-301 is a recombinant protein with extra-cellular domain of Neuregulin 1 Beta, one primary activating ErbB4 receptor. This regulation of the Neuregulin 1 signaling pathway has been linked to neurodevelopmental and neurodegenerative disorders including and beyond Parkinson’s disease. Pre-clinical data with an analog of MIN-301 represented in December 2015 at the ACNP. This data demonstrates the beneficial effect of treatment on behavioral and mortal deficits in animal models of Parkinson’s disease. Results also suggest that neuroinflammatory surrogate markers were controlled and thus should be explored in future studies. The next planned step in the MIN-301 program are the timing of an IND in the US or an investigational and medicinal product dossier IMPD in Europe and pending acceptance by regulatory authorities initiation of Phase 1 clinical testing thereafter. We would also like to acknowledge a key hire for Minerva late last year in the person of Professor Michael Davidson, our Chief Medical Officer. We expect that Dr. Davidson’s deep expertise in CNS disorders, its insight in to the development strategy and regulatory review of new agents to treat neuropsychiatric diseases and explore knowledge of clinical trial conduct will help us realize the potential of Minerva’s portfolio of products. In summary 2016 saw the emergence of a number important positive clinical results with MIN-101, MIN-202 and MIN-117. These results and the scores of potential of these product candidates of innovative and differentiated in the respective indications. Importantly, they also represent a solid foundation for the next round of clinical trials planned to begin in 2017. I will now turn the call over to Geoff to cover our financial results.

[Geoff Race:]

Thank you, Remy. Earlier this morning we issued a press release summarizing our operating results for the fourth quarter and year-ended December 31, 2016. A more detailed discussion of our results may be found in our annual report on Form 10-K filed with the SEC earlier today. Net loss was $9.4 million for the fourth quarter of 2016 or a loss per share of $0.27 basic and diluted, compared to a net loss of $8.4 million for the fourth quarter of 2015, or a loss per share of $0.34 basic and diluted. Net loss was $31 million for the year ended December 31, 2016 or a loss per share of $0.99 basic and diluted, compared to a net loss of $27.1 million or a loss per share of $1.16 basic and diluted for the year ended December 31, 2015. Research and development expenses were $6.5 million in the fourth quarter of 2016, compared to $6.3 million in the fourth quarter of 2015. R&D expenses were at $20.4 million for the year ended December 31, 2016 compared to $18.5 million for the year ended December 31, 2015. This increase in R&D expenses primarily reflects higher development costs under the MIN-202 program for Phase 2 clinical trial preparation and an increase in non-cash stock based compensation expenses. This increase was partially offset by decreased expenses due to the completion of our Phase 2b clinical trial of MIN-101. General and administrative expenses were at $2.7 million in the fourth quarter of 2016, compared to $1.9 million in the fourth quarter of 2015. G&A expenses were $9.8 million for the year ended December 31, 2016 compared to $7.6 million for the year ended December 31, 2015. The increase in general and administrative expenses was primarily due to an increase in non-cash stock based compensation expenses, personnel costs and professional fees during the year ended December 31, 2016. At December 31, 2016 the company’s cash, cash equivalents and marketable securities were approximately $83 million, compared to $32.2 million as of December 31, 2015. During 2016, the company received approximately $23.4 million in proceeds from the exercise of warrants granted in connection with a private placement in March 2015, approximately $1 million from a common stock purchased by a director of the company, and net proceeds of approximately $53.7 million from a public offering of common stock. We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated capital requirements for at least 12 months from today. The assumptions upon which we have based our estimates are under constant review and subject to change. The actual amounts and timing of our research and development expenditures may vary depending on a number of factors including but not limited to those related to the design, timing and duration of future clinical trials. We anticipate that our available financial resources will allow us to initiate the next clinical trials with our product candidates, particularly MIN-101 on a timely basis. Now I’d like to turn the call over to the operator for any question. Operator?

[Operator:]

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

[Jason Butler:]

Just a couple of MIN-202, can you give us any color on what - other than finalizing trial design whether there are any gaining items in the non-clinical studies ongoing right now that needs to be completed before starting the next trials. And then can you give us any color on the likely or a potential trial designs or patient populations that you intend to study in the next trials. Thanks.

[Remy Luthringer:]

Thank you Jason for this question, Remy speaking. As the work which is currently ongoing is really standard work in order to speed up the process and to have altogether in order to run the two clinical trials. So nothing in particular, just I have to say doing the studies in order to be ready to move. In terms of the two studies we currently plan to carry out in patients so far with insomnia. So primary insomnia indication, we are really planning it for study where we confirm what we have seen in the Phase IIA in terms of efficacy, also in terms of very improved day time functioning in these patients. So we will have a lot of pharmacodynamics measurements in addition to the efficacy measurements based on poly-somnography and some clinical scales. And we will also have some comparison with the standard of care in order to really position our molecule at best. In depression, here again it will be done as it has been done in the phase 1b, so it is really a study which is very similar in terms of study design and in terms of adding it to standard of care as well. So this is what I can tell you today about the two studies.

[Operator:]

[Operator Instructions] our next question comes from Byron (inaudible) with Jefferies. You may begin.

[Unidentified Analyst:]

On MIN-101 Fda’s meeting coming up, would you hope to agree with FDA on what are one of the outstanding issues currently that you hope to iron out by FDA meeting?

[Remy Luthringer:]

I’m afraid that i did not completely understand the end of your sentence, can you repeat please.

[Unidentified Analyst:]

Are you hoping to gain agreement with the agency on primary endpoint for the trial or is there something that you feel that FDA will likely agree with your study design and what other outstanding items are you hoping to discuss with FDA at the meeting?

[Remy Luthringer:]

So definitely this meeting is to confirm the primary endpoint and also the study design of our study. So clearly this is a primary objective. And yes indeed the agency will decide we are already proposing a study design which is very clear and meanwhile the questions are extremely well laid out. So I hope that we will have a complete clear answer on this aspect. So the additional things we will also discuss with the FDA are again very standard things. In other words the CMC part is a DGI study which you have to carry out in parallel with the Phase 3 program, all this having an objective to be ready when we have the readout of the Phase 3 study with all the additional activities you have to do around this pivotal study.

[Unidentified Analyst:]

And then just on the new formulation, where is that currently? Is that been finalized, and when will we see the PK/PD data on the new formulation.

[Remy Luthringer:]

So this is a work which is progressing well and obviously we will have this data finalized before starting the Phase 3. So this I think is what I can say, but clearly yes, indeed as soon as this formulation work is finalized we will report on this without any problem.

[Operator:]

[Operator Instructions] And 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:]

Really thank you everybody to be with us today and looking forward to speak with you very soon. 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.