Minerva Neurosciences, Inc.
Q4 2014 Earnings Call Transcript

Published: 26 Mar 2015

[Operator:]

Welcome to Minerva Neurosciences Fourth Quarter and Year-End 2014 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end. This call is being webcast live on the Investors section of Minerva’s website at minervaneurosciences.com. As a reminder, today’s call is being recorded. I would now like to turn the call over to Joe Reilly, Chief Operating Officer at Minerva. Please proceed.

[Joseph Reilly:]

Good afternoon. A press release with the company’s fourth quarter 2014 financial results became available at 4 PM Eastern Time today and can be found on the Investors section of our website. Joining me on the call today from Minerva are, Dr. Remy Luthringer, Chief Executive Officer, President, and Chief Scientific Officer and Mr. Geoff Race, Executive Vice President and Chief Financial Officer. Following our prepared remarks we will open the call for Q&A. Before we begin, I’d like to remind you that today’s discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. Among the factors that could cause actual results to differ materially include the initiation, timing, cost, progress, and success of our research and development, preclinical studies, and clinical trials. Developments relating to our competitors and our industry, including the success of competing therapies that are or may become available, our ability to advance product candidates into and successfully complete clinical trials and other factors identified from time to time in reports filed with the Securities and Exchange Commission. Any forward-looking statements made on this call speak only as of today's date, Thursday, March 26, 2015, and the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today's date. I would now like to turn the call over to Remy Luthringer.

[Remy Luthringer:]

Thank you and good afternoon everyone. Thanks for joining us today. I am very pleased with Minerva's accomplishments over the past year and with the past few months in particular which laid the ground work of the numerous upcoming milestones across our lead programs and broader pipeline. As we have discussed, our goal is to be a leader in the development of novel CNS [ph] therapeutics. This is an area of tremendous unmet medical need and we believe we have made important progress over the past year. We currently have four clinical stage compounds in development, each with transformative potential and each with key near-term milestones. Together we are working with large pharma partners including Janssen Research & Development, one of the Janssen Pharmaceutical companies of Johnson & Johnson and Mitsubishi Tanabe. I am also very pleased to be working with the world class team both within the company and in our network of consultants, key opinion leaders, and advisors to bring this product forward. With that let me now turn to our pipeline. Let’s start with progress on our lead asset MIN-101, an innovative serotonin 5-HT2A and sigma2 receptor antagonist which we are evaluating in schizophrenia. MIN-101 has shown strong efficacy on negative symptoms and the broader spectrum of schizophrenia symptoms including positive symptoms, cognitive impairment, and sleep disorders and has the potential to avoid the severe side effects of existing therapies including sedation, extrapyramidal symptoms, plasma prolactin increase, metabolic disorders, and weight gain. In December we announced the completion of development and the final selection of a once daily dose formulation of MIN-101 which we intend to use in our planned phase 2b clinical trial in schizophrenia. In Europe we submitted an application to run a multicenter randomized double blind parallel wound design study in the first quarter of 2014 and we are very pleased to announce that we have received the first regulatory approval in Latvia and the first ethical committee approvals in Latvia and Estonia to start this trial. The studies exploring the effect of two doses on MIN-101, 32 milligram and 64 milligram given once daily versus placebo in 234 stable schizophrenic patients with the history of negative symptoms. Patients will receive treatment once daily for three months followed by an optional extension of six months. The primary efficacy end point will be to evaluate the differences from placebo of negative symptoms after the three months treatment period as measured by the change from baseline implants, positive and negative syndrome scale. The BNSS, brief negative symptoms scale will also be applied to further explore effects of MIN-101 on negative symptoms. We plan to also investigate the effects on positive symptoms and overall symptoms of schizophrenia measured by puns and the clinical global impression writing scales. Cognitive function, sleep, and improvement in function will be explored as well are secondary measures. Clinical and biological safety and plasma pharmacokinetics will also be part of the study. Enrollment is expected to occur over the last three quarters of 2015. We anticipate top line results in the second quarter of 2016. While we plan to initially develop MIN-101 as a first line immunotherapy during potential phase 3 trials for MIN-101, we might also explore quad ministration with atypical anti-psychotics. We believe there is also an opportunity and a strong scientific rationale to use MIN-101 in urban Europe psychiatric diseases outside of schizophrenia like severe mood or neurodegenerative disorders. Now turning to the next product in our pipeline, we also have exciting updates to report for our insomnia compound to MIN-202 for which we will be initiating two new studies in mid 2015. MIN-202 is our selective orexin-2 receptor antagonist under development in collaboration with Janssen Research and development, one of the Janssen pharmaceutical companies of Johnson & Johnson for the treatment of primary and comorbid insomnia. Its unique mechanism of action aims to treat insomnia by controlling the activity of the neurons that promote wakefulness. In January 2015 we reported preliminary results from a phase 1 placebo control clinical study conducted by Janssen showing the treatment with MIN-202 resulted in statistically significant improvements in sleep onset and sleep duration in patients with comorbid insomnia related to major depressive disorder MDD. Additional results from a phase 1 bioavailability study and the phase 1 multiple ascending dose study in healthy volunteers also suggested that MIN-202 is well tolerated and possess advantages pharmacokinetic, pharmacodynamic features. The first of the two new MIN-202 studies is a phase 2 a study in primary insomnia which is expected to initiate in mid 2015. Also in mid 2015 we expect to initiate a phase 1b trial in patients with MDD with comorbid insomnia. Minerva has an exclusive co-development agreement with Janssen, an exclusive commercialization right for this molecule in Europe. We have recent important progress to report in out broader CNS portfolio as well which includes MIN-117 for major depressive disorders and MIN-301 for Parkinson's disease. Today we announced that we received ethical committee approvals in Latvia for a Phase 2a study of MIN-117 in 60 patients which we plan to begin enrolling in the second quarter of 2015. This will be a randomized, double-blind parallel group placebo and active control study to evaluate the efficacy and safety of MIN-117, 0.5 milligram in patients with MDD. The primary objective is to evaluate the efficacy of MIN-117 0.5 milligram compared to placebo in reducing the symptoms of a major depressive episode as measured by the trends from baseline in the Montgomery-Asberg Depression Rating Scale (MADRS), total score over six weeks of treatment. Safety and tolerability of MIN-117 will also be explored in comparison to the active control paroxetine given at a therapeutic dose of 20 milligram per day. Finally moving to MIN-301, our investigational neuregulin-1 beta1 compound for the treatment of Parkinson's disease. In January we announced results from a Primomed, use of primate models to support translational medicine, non-human primate study that showed treatment with an analog of MIN-301 resulted in improvements in a range of symptoms associated with Parkinson's disease. Animals treated with daily subcutaneous injection of the MIN-301 analog showed a protective effect of our molecule against MPTP induced tremor measured by the abnormal involuntary movements scale aims and decreased motor control measured by the Bungalow test compared to vehicle. Results were also consistent with previous research in rodent models of Parkinson's disease that has shown that MIN-301 has a potential to restore motor function. As the next step we intend to file an IND or IMPD for MIN-301 in 2016 with an expected phase 1 clinical study to begin promptly thereafter. So to summarize we have made a lot of progress since our initial public offering and we are excited that we expect to initiate four clinical studies in 2015 with milestones in late 2015 through mid 2016. Now I will turn the call over to Jeff to cover our financial results for the fourth quarter and full year 2014.

[Geoff Race:]

Thank you, Remy. Earlier this afternoon we issued a press release summarizing our results of operations for the fourth quarter 2014. A more detailed discussion of our results may be found in our annual report on Form 10-K filed earlier today. Let's start with our cash position. Cash and cash equivalents as of December 31, 2014 were $18.6 million, compared to $1.8 million as of the prior year. Earlier this year, we took steps to further strengthen our cash position. In January 2015 we entered into a term loan with Oxford Financing LLC and Silicon Valley Bank for up to $15 million. Under this agreement we drew down $10 million in January 2015. In March 2015 we raised net proceeds of approximately $28.8 million through the issuance of $6.3 million common shares with 100% warrant coverage in a private placement. Our current cash is anticipated to fund our operations through 2016 excluding any proceeds which may be received in connection with the exercise of the warrants issued in our recent private placements. Research and development expenses were $3 million in the fourth quarter of 2014 compared to $200,000 in the same period in 2013 and $42.9 million for the full year ended December 31, 2014 compared to $700,000 in the same period in 2013. These increases were primary due to increased costs related to our four drug development programs including a $22 million license fee paid to Janssen under the co-development agreement from MIN-202 and increased cost for salaries and stock compensation expense related to additional staff hired during 2014. General and administrative expenses were $4.5 million in the fourth quarter of 2014, compared to $1.9 million in the same period in 2013. And $12 million for the full year ended December 31, 2014, compared to $2.5 million in the same period in 2013. These increases were primarily due to increased cost related to our operation as a public company, an increased cost for salaries and stock compensation expense related to additional staff hired during 2014. Net loss was $7.4 million for the fourth quarter of 2014, or a loss per share of $0.40 basic and diluted as compared to net loss of $2.1 million or a loss per share of $0.41 basic and diluted for the same period in 2013. For the full year ended December 31, 2014 net loss was $56.9 million or a loss per share of $4.47 basic and diluted, as compared to net loss of $3.3 million or a loss per share of $0.78 basic and diluted for the same period in 2013. In short we are quite pleased with our financial position as we have the resources to take our pipelines forward to important milestones in the near-term. Now I’d like to turn the call over to the operator for any questions and answers. Operator?

[Operator:]

[Operator Instructions]. And our first question comes from the line of Brian Skorney with Robert W. Baird. Your line is now open, please proceed with your question.

[Brian Skorney:]

Hey, good afternoon guys. Thanks for taking my questions. I guess starting on MIN-101, so you said that enrollment will occur over the last three quarters of 2015 in the phase 2b study, should we read that to mean you are expecting enrollment to complete by the end of this year and if that’s the case should we expect data in the first half next year or is it more mid 2016 and can you also just review the powering assumptions on the end point in that study?

[Operator:]

Pardon me speaker's your phones maybe on mute.

[Geoff Race:]

I can hear you operator, let me start that, Brian hi, its Jeff. Hopefully Remy will join in a second. So to go to your first question about enrollment, that’s exactly right. We are now expecting to enroll patients into the study over the final three quarters of 2015. We expect to have enrolled old patients by the end of the year. This is of course a three month study as you’ll recall so the last patients into the study at the end of this year will obviously receive three months treatment which will take us into the end of the first quarter, beginning of the second quarter and we can expect top line data in the middle of 2016. So to go to your second question about powering I think we probably need Remy to respond to that. I am hoping he is back on the line.

[Remy Luthringer:]

Can you hear me?

[Geoff Race:]

Yup.

[Remy Luthringer:]

So thank you Jeff, yes Brian I mean the powering of the study is based on the results we obtained in the phase 2a study. So we expect a difference between placebo and treatment on the negative symptoms core of the pan [ph] scale 3.5 points. And as powering it is the first 90% so this is the assumptions we have on the primary end point.

[Brian Skorney:]

Great, and then just real quick on MIN-117, can you give us thoughts on the rationale for looking at the 0.5 mg dose as opposed to doing some additional dose exploration in the phase 2a?

[Remy Luthringer:]

So, this is very good point. So, we had worked quite a lot on as the dose finding both in preclinical and in the clinical pharmacology studies in healthy volunteers and always pointing to where those affect at very low dosage, very effective in what we would like to demonstrate first of all, quicker onset or a very quick onset in terms of reversing mood and also in what is really the unmet need as well which is improvement of cognition and sexual function. And again, very low dosage not working at 0.5 milligram or an equivalent of 0.5 milligram if you are going back to the animal studies. So this is rationale wise and as you know, it is very important to have an extremely safe drug for an antidepressant because this in some cases might be a chronic treatment and really to have a very safe drug, well tolerated drug, and the drug improving somehow condition and sexual function is very important. So this is the rationale behind the selection of this open five dose.

[Brian Skorney:]

Great, thanks guys.

[Operator:]

[Operator Instructions]. And with no further questions in the queue, I would like to turn the call over to Remy Luthringer for closing remarks.

[Remy Luthringer:]

So, really thank you to all for your participation in today's call and we really look forward to updating you on our progress in the next coming months. Thank you all and have a nice evening.

[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.