Minerva Neurosciences, Inc.
Q3 2015 Earnings Call Transcript

Published: 8 Nov 2015

[Operator:]

Welcome to the Minerva Neurosciences Third Quarter 2015 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 Web-site 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 B. Boni:]

Good morning. A press release with the Company's third quarter 2015 financial results became available at 7.30 AM Eastern Time today and can be found on the Investors section of our Web-site. Our quarterly report on Form 10-Q was also filed electronically with the SEC this morning and can be found on the SEC's Internet Web-site at www.sec.gov. Joining me on the call today from Minerva are Dr. Remy Luthringer, President and Chief Executive 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 would 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. These forward-looking statements are based on our current expectations and may differ materially from actual results due to a variety of factors including, without limitation, whether any of our therapeutic products will advance further in the clinical trials process; whether, when and to what extent results from such trials will be available; and whether and when, if at all, such products will receive final approval from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies, and for which indications; whether any of our therapeutic products will be successfully marketed if approved; whether any of our therapeutic product discovery or development efforts will be successful; our ability to achieve the results contemplated by our co-development agreements; management's ability to successfully achieve its goals; our ability to raise additional capital to fund our operations on terms acceptable to us; the sufficiency of our current cash position to fund our operations; and general economic conditions. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption 'Risk Factors' in our filings with the SEC, including our quarterly report on Form 10-Q for the quarter ended September 30, 2015, filed with the SEC on November 5, 2015. Any forward-looking statements made on this call speak only as of today's date, Thursday, November 5, 2015, and the Company disclaims any obligation to update any of these forward-looking statements to reflect events or circumstances that occur after today's call, except as required by law. I would now like to turn the call over to Remy Luthringer.

[Remy Luthringer:]

Thank you, Bill, and good morning everyone. Thanks for joining us today. As we are near the end of 2015, the ongoing trials with our three clinical stage compounds are proceeding according to plan. We are excited about the important milestones for these compounds that we expect to take place during the first half of 2016. Four clinical studies will read out in our target indications of schizophrenia addressed by our molecule MIN-101, primary insomnia and comorbid insomnia as an adjunctive treatment to antidepressants in patients suffering from mood disorders addressed by our molecule MIN-202, and finally major depressive disorders MDD addressed by our molecule MIN-117. These important data readouts have the potential to create a strong foundation for the next stage of clinical development with our products, which we believe has the potential to address unmet needs of patients suffering from those CNS disorders. Let me now address our programs individually and in more detail beginning with MIN-101. I'm very pleased to report that we are nearing the completion of recruitment in the Phase IIb trial with MIN-101, our lead product intended to treat patients suffering from schizophrenia, including the unmet needs of negative symptoms and cognitive impairment. MIN-101 is both a 5-HT2A antagonist and a sigma2 antagonist. It does not block postsynaptic dopaminergic receptors and thus may avoid the side effects of [certain] [ph] existing therapies. This randomized, double-blind, placebo-controlled, parallel group study has an enrolment target of 234 patients. Its primary objective is to evaluate the efficacy of two doses of MIN-101, 32 mg and 64 mg per day, compared to placebo in improving the negative symptoms of schizophrenic patients, as measured by the change from baseline into Positive and Negative Symptom Scale PANSS, negative subscale score of 12 weeks of treatment. Patients who respond well to MIN-101 will have the opportunity to enter an extension period of six months. All patients will be in active treatment during this extension phase. We anticipate the top line results for the core 12 week treatment evaluation period of this trial will be available in the second quarter of 2016. Over the last few months, momentum has increased significantly in Minerva's product development program with MIN-202, which is being co-developed with Minerva and Janssen Pharmaceutica NV. This compound is a selective orexin 2 receptor antagonist for the treatment of primary and comorbid insomnia in patients suffering from depression. Two randomized, double-blind, controlled trials with MIN-202 are ongoing. These include the Phase IIa trial in primary insomnia disorder and the Phase Ib trial in MDD patients. In the latter trial, MIN-202 is administered as an adjunctive treatment to marketed antidepressants. Let me provide details of these two trials. The Phase IIa trial in primary insomnia disorders is aiming to evaluate MIN-202 in 26 subjects without any psychiatric co-morbidity symptoms. The study design is based on a Latin Square design. Thus, MIN-202 and placebo are given in a balanced way during two treatment periods which are [then provided] [ph] by a washout period. The primary endpoint is sleep efficiency as measured objectively by polysomnography. Secondary endpoints include assessments of additional sleep architecture and continuity parameters, cognition and safety. The data readout is expected in the first half of 2016. The Phase Ib trial in depressed patients is designed to evaluate treatment with MIN-202 in 48 subjects with DSM-5 diagnosis of MDD. Patients are enrolled in three groups treated with MIN-202, diphenhydramine used as a positive control and placebo respectively, while maintained on their antidepressant regimens. The primary endpoint is safety and secondary endpoints include assessment of depressive symptomology, cognition and sleep. The data readout is expected in the first half of 2016. Our third clinical stage compound is MIN-117 under development to treat major depressive disorders or MDD. MIN-117 acts by targeting multiple receptors associated with the control of mood. The development of MIN-117 is driven by the need for new treatments for patients suffering from mood disorders that combine faster onset with preserved cognition and sexual function. We believe patients who partially respond or do not respond to currently marketed antidepressants may also benefit from MIN-117. The Phase IIa trial is ongoing and has a target enrollment of 80 patients in four groups of 20 patients each who are receiving 0.5 mg of MIN-117 daily, 2.5 mg of MIN-117 daily, 20 mg of paroxetine or placebo. The primary objective is to evaluate the efficacy of the two doses of MIN-117 compared to placebo in reducing the symptoms of a major depressive episode as measured by the change from baseline in the Montgomery-Asberg Depression Rating Scale, MADRS, total score over six weeks of treatment. The top line results from this trial are expected in the first half of 2016. Finally, our earliest stage product candidate is MIN-301 in preclinical development to treat Parkinson's disease. This potentially disease modifying therapy is the extracellular domain of Neuregulin-1b1, a protein activating primarily the ErbB4 receptor. Our role is to explore the possible application of MIN-301 in neurodevelopmental and neurodegenerative disorders beyond Parkinson's disease. The next planned steps in this program are the filing of an IND in the U.S. or an Investigational Medicinal Product Dossier, IMPD, in Europe, and pending acceptance by regulatory authorities the initiation of Phase I clinical testing thereafter. In summary, the first half of 2016 is expected to have several important clinical data milestones. The results generated from the trials I have described will help us to design the next stages of clinical development with our product candidates. I will now turn the call over to Geoff to cover the financial results.

[Geoff Race:]

Thank you, Remy. Earlier this morning we issued a press release summarizing our operating results for the third quarter and first nine months of 2015. A more detailed discussion of our results may be found in our quarterly report on Form 10-Q also filed earlier today. At September 30, 2015, the Company's cash, cash equivalents and marketable securities, current and non-current, were approximately $38.9 million, compared to $18.5 million as of December 31, 2014. As we stated last quarter, we expect that our current cash, cash equivalents and marketable securities, both current and non-current, will be sufficient to fund operations into the fourth quarter of 2016. Research and development expenses were $3.8 million in the third quarter of 2015, compared to $24.7 million in the third quarter of 2014. For the nine months ended September 30, 2015, R&D expenses were $12.2 million compared to $39.9 million for the nine months ended September 30, 2014. Research and development expense in the three and nine months ended September 30, 2014 included a $22 million license fee paid to Janssen pursuant to our co-development agreement for MIN-202. R&D expenses in the nine months ended September 30, 2015 and 2014 included non-cash stock-based compensation expenses of $0.4 million and $13 million respectively. Excluding stock-based compensation and the $22 million license fee, R&D expenses for the Company's drug development programs for the three and nine months ended September 30, 2015 totaled $3.6 million and $11.9 million respectively, versus $2.6 million and $4.9 million in the prior year period. These increases over the prior year in R&D expenses for the Company's drug development programs for the three and nine months ended September 30, 2015 of $1 million and $7 million respectively primarily reflect increased expenses related to the Phase IIb clinical trial of MIN-101, the Phase IIa trial of MIN-117 and the recent MIN-202 clinical trials. General and administrative expenses were $1.9 million in the third quarter of 2015, compared to $2.4 million in the third quarter of 2014. For the nine months ended September 30, 2015, G&A expenses were $5.6 million, compared to $7.5 million for the same period in 2014. The decreases in G&A expenses for the three and nine months ended September 30, 2015 were primarily due to a decrease in non-cash stock-based compensation expense of $0.4 million and $1.6 million respectively. Net loss was $5.9 million for the third quarter of 2015 or a loss per share of $0.24 basic and diluted, as compared to a net loss of $27.2 million or a loss per share of $1.53 basic and diluted for the third quarter of 2014. Net loss was $18.6 million for the first nine months of 2015 or a loss per share of $0.81 basic and diluted, as compared to a net loss of $49.5 million or a loss per share of $4.58 basic and diluted for the first nine months of 2014. As outlined in previous earnings calls, we continue to expect our current financial position to enable us to advance our drug development pipeline through the important future clinical milestones described earlier by Remy. Now I'd like to turn the call over to the operator for any questions. Over to you, operator.

[Operator:]

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

[Jason Butler:]

Congratulations on the progress this quarter. I guess just a question starting off on MIN-101, there's nothing approved for negative symptoms specifically, but some drugs, for example Abilify, have shown statistically significant improvements on negative symptoms with schizophrenia patients. Could you maybe put into context for us what would be viewed as clinically meaningful improvements in negative symptoms in the Phase IIb study?

[Remy Luthringer:]

Thank you, Jason, for this question and it's an important question. So I think that any improvement in negative symptoms is seen by the patients or the clinicians as an improvement, but to be really clinically meaningful I guess you need to have an improvement which is going beyond 3 points differences from placebo after two to three months of treatment. So this is what we are targeting. So, more than 3 points seems to be clinically meaningful.

[Jason Butler:]

Okay, that's helpful. And then just on MIN-301, could you talk about what your initial trials could look like, and obviously their primary focus will be safety, but what initial efficacy data we could get out of the first trials that you look in terms of patients?

[Remy Luthringer:]

So obviously the complete plan is not defined, but definitely it will be a combination between safety, efficacy and to better understand those relationship, but I guess I cannot say more today because it is an effort which is ongoing in order to define the best Phase I planning.

[Jason Butler:]

Okay, great. Thanks for taking the questions.

[Operator:]

[Operator Instructions] I see no further questions at this time. I would like to turn the conference back over to our host for any closing comments.

[Remy Luthringer:]

Thank you really all for participating to today's call and we are really looking forward to updating you on our progress in the next coming months. Thank you again.

[Operator:]

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a good day.