Minerva Neurosciences, Inc.
Q2 2015 Earnings Call Transcript

Published: 10 Aug 2015

[Operator:]

Welcome to the Minerva Neurosciences Second Quarter 2015 Conference Call. [Operator Instructions] This call is being webcast live on the investor 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 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 [ph] quarter 2015 financial results became available at 7

[Remy Luthringer:]

Thank you Bill and good morning everyone. Thanks for joining us today. We concluded the second quarter of 2015 having made measurable progress across our lead clinical development programs. These programs are based on our insight into disease pathology and I believe that our compounds process in a variety of mechanisms of action able to affect such pathology. Our goal is to address the significant unmet needs of major patient populations suffering from diseases of the central nervous system. We are leveraging our clinical development experience and network of investigators in Europe, as well as US and European key opinion leaders to conduct our trials with these compounds. We see several advantages of this strategy, including access to well characterized and validated patient populations and highly trained physicians with extensive experience in running trials in CNS disorders. Positive data generated from this randomized double-blind placebo-controlled trials will support a clinical advancement of this product in multiple regulatory jurisdictions. Let me move now to our product candidates. Our lead asset is MIN-101, an innovative serotonin 5-HT2A and sigma2 receptor antagonist which we are evaluating in schizophrenia patients with a history of negative symptoms. This seems to persist chronically throughout an individual’s little lifetime and increase with severity of a time representing one of the major unmet needs for patients. In Phase IIa testing MIN-101 suggested positive treatment effects including therapeutic benefit related not only to negative symptoms, but also to the broader spectrum of schizophrenia symptoms, including positive symptoms, cognitive impairment, and sleep disorders. Importantly, we believe this compound also has a potential to avoid the severe side effects of existing therapies, including sedation, extrapyramidal symptoms, plasma prolactin increase, metabolic disorders, and weight gain. Building of the Phase IIa results we have moved forward with the Phase IIb study with MIN-101. Approximately 40 clinical sites have been initiated in six countries in this randomized double-blind parallel group design study. We are exploring the effects of two doses of MIN-101, 32 mg and 64 mg given once daily versus placebo in 234 stable schizophrenic patients with a history of negative symptoms. Enrollment is underway and is expected to continue through the end of 2015. We anticipate that top line results for the core 12 weeks evaluation period will be available in the second quarter of 2016. Our second clinical stage compound is MIN-117 and the development of treat major depressive disorder through multiple mechanism acting on several receptors associated with the control of moods. In the ongoing Phase IIa trial, we will be closely evaluating the time to mood improvement and the side effect profile of MIN-117, understanding that the compound that has a faster onset of existing therapies and preserve sexual function and cognition will be positively differentiated in the treatment of MDD. The first patient has been dosed in the Phase IIa trial, which we compare as a therapeutic impact of two doses of MIN-117, 0.5 mg and 2.5 mg daily to paroxetine and placebo. We plan to enroll 80 patients in this trial with 20 patients in each of the four groups. The primary endpoint of the trial will be the efficacy of MIN-117 versus placebo in reducing depressive symptoms Topline results expected are expected in the first half of 2016. The third program I would like to discuss today is MIN-202, our selective orexin-2 receptor antagonist for the treatment of primary of primary and comorbid insomnia. We are developing this product with our partner, Janssen Pharmaceutica NV. Data from our European Phase Ib single dose study with MIN-202 in patients with major depressive disorders, MDD indicate a potential favorable pharmacokinetic and safety profile, as well as a pharmacodynamic profile for insomnia treatment. Polysomnography data from the Phase Ib study in MDD patients showed that the selective blockade of orexing-2 by MIN-202 not only accelerated sleep induction and plunged sleep duration but more importantly also preserved physiological or restorative sleep. Preclinical and single ascending dose clinical data with MIN-202 were presented by Janssen at the 29th Annual Meeting of the Associated Professional Sleep Societies, Sleep 2015 this past June. Janssen has doors to the first patient in a European Phase Ib study of MIN-202, (JNJ-42847922) as an adjunctive treatment for major depressive disorder and has opened an investigational new drug application IND for this indication in the US. In addition, we expect that Janssen will initiate a Phase IIa study with MIN-202 in insomnia disorder within the next few months. Data readouts from both Phase Ib and Phase IIa trial are expected in the first half of 2016. We believe there is significant potential for MIN-202 in these indications. Importantly, we also believe the company may be positively differentiated from other treatments by its unique mechanism of action, which aims to treat insomnia by controlling the activity of the neurons that promote wakefulness. Our early stage product candidate is MIN-300 a compound based on an investigational extracellular domain of neuregulin-1 beta1 to treat Parkinson's disease. In this program, we are looking for a disease modifying therapy with a potential street range of symptoms, not just motor impairment with fewer side effects and current therapies. Early in 2015, results were announced from a non-human primate study showing that treatment with an analog of MIN-301 improvements the range of symptoms associated with a Parkinson's disease model in primates. This finding complemented the beneficial effect of MIN-301 observed in non-primate preclinical models. The planned steps in the program of the filing of an IND in the US or an investigational medicinal product dossier, IMPD in Europe in 2016 and pending acceptance by regulatory authorities and the initiation of Phase I clinical testing thereafter. We are building towards an exciting period of data readout expected in 2016. Such data has a potential to further validate innovative mechanism of action underlying our product candidates and to create knowledge base necessary to move our compounds forward in clinical development. We are hopeful that this data will pave the way towards advanced clinical testing and eventually towards the availability of new options for physicians and for patients suffering from debilitating diseases. I will turn the call over to Geoff to cover our financial results.

[Geoff Race:]

Thank you, Remy. Early this morning we issued a press release summarizing our operating results for the second quarter of 2015. A more detailed discussion of our results be found in our quarterly report on Form 10-Q also filed earlier today. At June 30, 2015 the company had cash, cash equivalents and marketable securities of approximately $44.8 million, as compared to $18.5 million as of December 31, 2014. Cash inflows for the six months ended June 30, 2015, included net proceeds of approximately $9.8 million in January 2015 from a fixed-rate term loan facility, with a 12 month period of interest only payments and a 30-month repayment term and a private placement in March 2015, under which we raised net proceeds of approximately $28.5 million. We expect that our current cash, cash equivalents, and marketable securities will enable us to fund operations into the fourth quarter of 2016. Research and development expenses for the three and six months ended June 30, 2015 were $4.5 million and $8.4 million as compared to $14.6 million and $15.1 billion in the prior year periods, respectively. Research and development expense in each of the three and six months ended June 30, 2015 and 2014 included non-cash stock-based compensation expenses of $0.2 million and $13 million. The decrease in stock-based compensation expense was primarily due to the vesting of approximately 0.9 million shares of common stock and approximately 0.4 million options to purchase common stock that were issued and fully vested during the second quarter of 2014. Excluding non-cash stock-based compensation expense R&D expenses for our four drug development programs for the three and six months ended June 30, 2015 totaled $4.3 million and $8.2 million respectively versus $1.6 million and $2.1 billion in the prior year period. These increases over the prior year in R&D expenses for our drug development programs for the three and six months ended June 30, 2015 of $2.7 billion and $6.1 billion, respectively primarily reflect increased expenses related to our Phase IIb clinical trial of MIN-101, our Phase IIa clinical trial of MIN-117 and the recent MIN-202 Phase I clinical trials. General and administrative expenses were $1.8 million in the second quarter of 2015, compared to $3.1 million in the second quarter 2014. General and administrative expense in the second quarter of each of 2015 and 2014 included non-cash stock-based compensation expenses of $0.4 million and $1.5 million respectively. The decrease in stock-based compensation expense was primarily due to certain options to purchase common stock that were issued and fully vested during the second quarter of 2014. Excluding stock-based compensation, general and administrative expenses for the three months ended June 30, 2015 & 2014 was $1.4 million and $1.6 million respectively. For the six months ended June 30, 2015 G&A expenses were $3.8 million, compared to $5.1 million for the six months ended June 30, 2014. General and administrative expense in the six months ended June 30, 2015 and 2014 included non-cash stock-based compensation expenses $0.6 million and $1.9 million respectively. Excluding stock-based compensation, general and administrative expenses were $3.2 million in both six month periods. Net loss was $6.6 million for the second quarter of 2015 or a loss per share of $0.27, basic and diluted as compared to a net loss of $19.4 million or a loss per share of $2.55 basic and diluted for the second quarter of 2014. Net loss was $12.7 million for the six months ended June 30, 2015 or a loss per share of $0.58 basic and diluted as compared to a net loss of $22.3 million or a net loss per share of $3.07 basic and diluted for the prior year period. We are pleased with our current financial position, which we expect will enable us to advance our drug development pipeline toward important future milestone. Now, I would like to turn the call over to the operator for any questions. Operator?

[Operator:]

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

[Harry Jenq:]

Hi this is Harry Jenq on for Jason Butler. I had two questions regarding the schizophrenia trial for 101, first could you provide some color on the number of patients that have been enrolled so far in the trial?

[Remy Luthringer:]

Yes, by end of July were at 70 patients.

[Harry Jenq:]

Okay great arm and has there been - on the same trial, has there been any protocol changes based on kind of initial experiences with the trial, for instance changes in the inclusion and exclusion criteria?

[Remy Luthringer:]

Definitely not. So, we are already following the protocol as it was when we started the trial.

[Harry Jenq:]

Got it. And just one quick last follow-up question, how exactly are you screening for patients to ensure that they have the history of negative symptoms?

[Remy Luthringer:]

First we do is highly, say documented history of the patients with physicians or investigators who know this patient since long and we are checking that the symptoms are present over the last three months. So, this has a criteria to enter patients into the screening phase.

[Harry Jenq:]

Great, thank you very much.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from the line of Brian Skorney of Robert Baird, your line is now open.

[Brian Skorney:]

Hey guys thank for taking the question. Couple of quick ones, I guess, when we think about the trial [indiscernible] for the MIN-101 study, in the context of the reformulation, how should we be thinking about the 32 and 64 mg doses on how the map to the – relative to the 30 mg BID dose exposures on the prior Phase II study? In other words will you expect a 32 mg or a 64 mg arms to be most similar to what was previously explored.

[Remy Luthringer:]

Thank you for the questions. So, as you know when we did the reformulation work before starting this Phase IIb study the objective of the reformulation was to go from twice a day to once a day and the objective was to have a very similar AUC by reducing the [indiscernible] of the parent compound and of the – some of the metabolize. So, basically what we have in this trial 64 mg and 32 mg are really how to say can be compared to the previous trial, so 64 mg compares to 32 BID in the previous trial and 32 mg in this trial is half of the dose, so it is really dose proportional. So, equivalent for 64 and half for 32.

[Brian Skorney:]

Got you. And then on MIN-301 I was wondering maybe you can give us a clarity on the steps left to IND, have you guys started GLP talks yet, or are there any steps ahead of GLP talk that you still need to do?

[Remy Luthringer:]

So we are preparing the file for the IND, so we have started somewhere preclinical work in order to prepare the long-term talk study.

[Brian Skorney:]

Got you. Just in terms of, there is [indiscernible] what scale are you guys there right now and what are the show manufacturing steps need to be taken, so what clinical material?

[Remy Luthringer:]

So, I did not completely the question because the line was not good, but definitely it is a peptide And we really have worked on the [indiscernible] of the peptide or the production of the peptide to be precise and we have a very good yield of this peptide and so we are very confident that we will be able to produce as a quantity necessary to run the preclinical program and the Phase I program.

[Brian Skorney:]

Great, thanks guys.

[Operator:]

Thank you. [Operator Instructions] and I am showing no further questions at this time, I like to hand the call back over to Remy Luthringer for any closing remarks.

[Remy Luthringer:]

Thank you all for the participation of today's call and I really look forward to updating you on our progress in the next coming months. Thank you so much.

[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.