Minerva Neurosciences Inc (NERV) 2014 Q3 法說會逐字稿

Welcome to Minerva Neurosciences' third-quarter 2014 financial results 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 Joe Reilly, Chief Operating Officer at Minerva. Please proceed.

Good afternoon. A press release with the Company's third-quarter 2014 financial results became available at 4 PM Eastern time today and can be found on the investor section of our website.

Joining me on the call today are Dr. Rogerio Vivaldi, Chief Executive Officer of Minerva; Dr. Remy Luthringer, 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 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 provision 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 and timing, cost, progress and success of our research and development, pre-clinical studies and clinical trials. Developments related to our competitors in 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, November 6, 2014 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 Rogerio Vivaldi.

Thank you, Joe. Good afternoon, everyone. Today, I will outline our recent pipeline products and how these investments reflect our dedication to the treatment of neuropsychiatric diseases in the patients in this field of unmet needs.

Let's start with the Q3 highlights. Dr. Remy Luthringer will review the specific clinical developments that are currently underway later in his prepared remarks, but I would like to quickly highlight our achievements where I am very excited by the progress we have made in the multiple upcoming milestones we are anticipating across our pipeline.

During the third quarter, we advanced our two main clinical products -- MIN-101, which we are preparing to Phase IIB trials for schizophrenia and MIN-202 for insomnia which is in multiple Phase I studies. Let's start with MIN-101.

We continue to advance MIN-101, our lead pipeline asset and initiate the new Phase I once-daily dose formulation of the compound that is being conducted in two parts. The objective of the first part is to assess different prototypes of the drugs and their plasma PK data after a single dose. We expect to release topline results from this part of the study in the near term with an announcement planned for the fourth quarter of 2014.

The second part of this trial will be to evaluate the selective prototype with those and time-related effects which will then be used in the Phase IIB study being planned in Europe, which we expect to begin enrolling in the first half of 2015.

On MIN-202, we are also making important progress with our insomnia program, including receiving FDA acceptance for our IND application for MIN-202 and our collaboration partner, Janssen, has now initiated Phase I bioavailability study in healthy volunteers in the US. We expect to announce topline results from these trials in the fourth quarter of 2014.

There are two other ongoing MIN-202 Phase I studies -- a multiple ascending dose study in healthy volunteers and the Phase IB study in patients with major depressive disorder also suffering from insomnia symptoms. And we expect to announce topline results from both studies in first quarter of 2015.

I will also like to announce that as of November 5, 2014, Remy Luthringer has been promoted to President and Chief Scientific Officer. As most of you know, Remy has served as Executive Vice President and head of R&D at Minerva since the inception of the Company. In his new role, he will be responsible for the evaluation, design and implementation of the strategy to advance the Company's pipeline in R&D programs.

In his career, Remy has been involved in development of more than 150 active molecules advanced to clinical stage research in the treatment of central nervous system diseases and disorders. And his extensive experience in both research and clinical psychiatric practice will be an even more important asset to our Company in his new role. I congratulate him for a well-deserved promotion.

With that, I would like to turn the call over to Remy to review the updates to our clinical programs in further detail.

Thank you, Rogerio. Turning first to MIN-101. MIN-101 is an innovative small molecule that acts as an antagonist on 5-HT2A and Sigma-2 receptors and in Phase IIA study has shown efficacy spectrum of symptoms for schizophrenia, plus [call out as the] negative symptoms, cognitive impairments and sleep disorders of the disease, which are underserved by current treatment options and constitute the main unmet medical needs.

MIN-101 also has the potential to avoid severe side effects of existing therapies including sedation, extra [payment of] symptoms, plasma production increase, metabolic disorders and weight gain. How we plan to initially developed MIN-101 as a first-line monotherapy of our Phase III trials, we also study its use in coadministration with atypical antipsychotics.

We believe there is also an opportunity to use MIN-101 with other neuropsychiatric diseases outside of schizophrenia like severe mood or neurodegenerative disorders.

We are currently conducting a Phase I trial of MIN-101 to come up with a once-a-day formulation and to assess those dependencies and time dependency features of our drug. The study is being carried out in healthy volunteers, and the main objective is to estimate the final optimal once-a-day formulation, which will be used in our Phase IIB trial in patients suffering from schizophrenia.

As Rogerio mentioned, this trial is being conducted in two parts. Part one is exploring the plasma levels of several prototypes of the drug after a single dose. The primary aim is to evaluate the plasma pharmacokinetic profile of the compound with a similar aggregate exposure level to that observed in the Phase IIA study in which the drug was administered twice a day.

Safety, tolerability and the pharmacokinetic profile in a fed and fasted state are also being assessed as well. Results are expected to be available in the fourth quarter of 2014. The data will be used to select the formulation which will be used in our Phase IIB study currently, which is in preparation.

Part II, utilizing the once-a-day formulation validated in part I will be administered over seven days at two dose levels to determine CNS pharmacodynamic effects and the plasma pharmacokinetic profile of MIN-101. The main CNS objective pharmacodynamic measurements are sleep perimeters, which were improved during the Phase IIA study. Safety, tolerability and vital signs will also be assessed.

Part II clinical activities will start in the first quarter of 2014 and results are expected to be available in the first quarter of 2015.

Phase IIB. With the results of our once-daily formulation in hand, we plan to submit a multi-sensor randomized placebo-controlled double-blind para-group design in Europe in the fourth quarter of 2014. The study will explore the effect of two doses of MIN-101, 32 milligram and 64 milligram in 234 stable schizophrenic patients with confirmed negative symptoms.

Patients will receive treatment once daily for three months, followed by an extension of six months. The primary endpoint for efficacy of this trial will be to evaluate the differences from placebo of negative symptoms after the three months treatment period as measured by the change from baseline in pounds positive and negative syndrome scale.

We plan to also investigate the effects on positive symptoms and overall symptoms of schizophrenia measured by pounds and the clinical global impression rating scales. Cognitive function, sleep and improvement in function will be explored as well as secondary measures. Clinical and biological safety in pharmacokinetics will also be part of the study.

Subject to receiving the necessary regulatory and ethical approvals in Europe, enrollment is expected to begin in the first half of 2015 with topline results expected in the first half of 2016.

Minerva holds an exclusive license of MIN-101, excluding most of Asia.

Now MIN-202 program, moving on to our second product candidate, MIN-202, is an innovative, selective orexin-2 receptor antagonist under development and collaboration with Janssen for the treatment of primary and secondary insomnia. We believe MIN-202 is one of the most advanced molecules with the mechanism of action to treat insomnia aiming to have inhibiting activity of the neurons that promote wakefulness.

The Phase I trials. In September, Janssen restated the Phase I bioavailability trial in the US following the FDA acceptance in our IND application. This is a randomized, open label, three-way chromosomal study to evaluate the bioavailability, food effect and safety and tolerability of a solid dosage formulation of MIN-202 in healthy male subjects. Primary results from this study are expected in the fourth quarter of 2014.

The Phase IB study is also ongoing in MDD patients suffering from secondary insomnia. The results of this study are expected to be available in the first quarter of 2015.

Finally, the Phase I multiple ascending dose study in healthy volunteers is also expected to produce topline data in the first quarter of 2015. This study is designed to evaluate the safety and tolerability of the drug as well as plasma PK characteristics. Stress hormone levels will also be explored.

Minerva has a codevelopment agreement with Janssen Pharmaceuticals, a J&J company that holds commercialization rights for this molecule in Europe.

The rest of the pipeline. In addition to our main compound MIN-101 and our collaboration with Janssen on MIN-202, we continue to assess the most capital-efficient development strategy, including the potential for collaborations for the other product candidate in our pipeline, including MIN-117 for major depressive disorders and MIN-301 for Parkinson's disease.

I will now turn the call over to Geoff to cover the financial results for the third quarter.

Thank you, Remy. Earlier this afternoon, we issued a press release summarizing our results of operations for the third quarter of 2014. A more detailed discussion of our results may be found in our Quarterly Report on Form 10-Q filed earlier today.

Now moving to our cash position. Cash and cash equivalents as of September 30, 2014, were $23.6 million compared to $1.8 million as of December 31, 2013. In July 2014, the sale of approximately 5.6 million shares in an IPO, including the partial exercise of the underwriters option to purchase additional shares and approximately 0.7 million shares in a private placement, resulted in net proceeds to the Company of approximately $29.9 million after deducting underwriter discounts, offering costs, loan repayments and a $0.7 million license fee payment to Proteosis.

The Company also sold approximately 3.3 million shares in July 2014 in a third private placement with Janssen, resulting in gross proceeds of $19.7 million. In conjunction with this private placement, the Company made a $22 million license fee payment to Janssen. Minerva expects that the proceeds from the IPO and private placements will be sufficient to fund its operating requirements through the end of 2015.

R&D expenses. Research and development expenses were $24.7 million in the third quarter of 2014 compared to $0.2 million in the same period in 2013. Included in research and development expense for the three months ended September 30, 2014 was $22 million associated with the license fee payment made to Janssen pursuant to our codevelopment agreement for MIN-202 and non-cash stock-based compensation expense of $0.1 million.

Excluding non-cash stock-based compensation expense and the $22 million license fee research and development expenses for the third quarter were $2.6 million versus $0.2 million in the same period last year. This increase was primarily due to $1 million related to once-a-day formulation studies initiated in 2014 for MIN-101 and $1.4 million in development costs for MIN-202 under our codevelopment agreement.

G&A expenses. General and administrative expenses were $2.4 million in the third quarter of 2014 compared to $0.3 million in the same period in 2013. Excluding a non-cash stock-based compensation expense of $0.8 million, general and administrative expenses were $1.6 million in the third quarter of 2014 versus $0.3 million in the same period in 2013.

The increase was primarily due to $0.3 million related to intellectual property matters and our operations as a public reporting company, and $1 million related to staffing, office leases and information systems to support our operations.

The net loss was $27.2 million for the third quarter of 2014 or a loss per share of $1.53 basic and diluted, as opposed to a net loss of $0.5 million or a loss per share of $0.12 basic and diluted for the same period in 2013.

And now, I'd like to turn the call over to the operator for any Q&A.

(Operator Instructions) Jason Butler, JMP Securities.

Thank you for taking the questions and congratulations on the progress. First question on MIN-202 and actually let me just start by congratulating Remy also on his promotion. Congrats, Remy.

So, on MIN-202, can you just give us some more color on what you are looking for out of this array of Phase I studies and what in your mind are go/no go hurdles that need to be crossed to move into further advanced development?

Jason, thank you for your congratulations. So MIN-202, these three studies as you heard one study is exploring insomnia in patients suffering from major depressive disorders; and here we are doing polysomnography so an objective measure of sleep. So here definitely this objective is very clear is to really show that the drug is improving sleep induction and sleep maintenance. So this is really to cover the effect on insomnia.

The second study, which is the multiple ascending dose study, is really to see what those PK characteristics of the drug and, as you know, when you're developing a drug for insomnia you need to have a very specific PK behavior which is really fitting very well with the PK/PD effect you're expecting which is, in other words, a quick sleep induction, an effect which is maintained over a few hours and afterwards when you wake up, you're completely refreshed so the drug should no longer be on board. So this is the second objective.

Because often this drug is given after repeated administration of several times, you need really to cover this. So this is really to cover this aspect. And the study (technical difficulty) done in the US which has been completed in the US is really to move from the liquid formulation, which has been used in the previous trials, to the solid formulation which is the formulation which will be used in Phase IIA studies.

So it's really to get a good understanding of the PK of the drug to get a good understanding about the PK/PD and to get first sense of efficacy using an objective measurement which is polysomnography.

Okay. Great, that's helpful. And then just a question for Geoff on the numbers. I guess two different ways to ask the question.

One, can you help us think about from the current base R&D spend excluding the payment to Janssen how we should think about that trend going forward? And then the second question, thinking about the current cash and putting into context what you think that gets you in terms of runway, both in terms of time and clinical catalysts.

Thanks for the question, Jason. I'll take the second one first. The runway hasn't changed from our original indication earlier this year and the current cash balance will take you through the end of 2015. That will take us most of the way through the Phase IIB study on 101 and it also obviously completes the first part of the 202 studies.

With regard to your second question, obviously there's been a lot of extraordinary expenditure in quarter two and quarter three, related to the IPO. In quarter four, we expect R&D expenditure to increase from that level reported in quarter three, the $2.6 million reported in quarter three. I would expect that quarter four R&D expenditure would be in the region of between $4 million and $5 million.

Great, thanks for the added color and, again, congratulations on the progress.

Thank you.

(Operator Instructions) Brian Skorney, Robert W. Baird.

I guess my only question is really when do you think we might work towards a US IND filing for MIN-101. Any thoughts about including some US sites in Phase IIB? I just know historically we've seen some ex-US studies in Phase IIB look good and then once US patients are included in Phase III, we've seen some failures.

So I just wondered if you could maybe just characterize thoughts about moving clinically into the US and how this Phase IIB study might be de-risked in terms of moving to Phase III from that perspective.

Remy, do you want to take this? Yes, go ahead.

So Brian, great question, obviously. So, as you can guess, we are working very intensively on preparing the file to go to the FDA. We are really compiling all the data and all the new data coming in are very important for this file. We have completely designed Phase IIB study. As you heard, the once-a-day formulation is also under control. So now I think it is the right time to go. So we are really working on this and as soon as we will be ready, which will be over the next few weeks, we will sit for our first meeting with the FDA.

So this will be a first meeting to get advice but I mean, we are working very hard on this to get it as quickly as possible. So this is the objective in terms of opening an IND.

Now the objective is to get the feedback from the FDA in terms of study design and to really get them also understanding what you are doing currently in Europe in order to have the possibility as soon as we have the IND to do some patients in the US if we are coming to this stage. But I mean we are really working hard on this and it should be a matter of some weeks to have the first meeting.

Great, thanks, guys.

(Operator Instructions) And I'm showing no further questions. I'd like to turn the conference back over to management for any closing remarks.

Thank you. Thank you all for your participation in today's call and, of course, we are very excited with the upcoming milestones that we just announced to you in the following months and we look forward to updating you again very soon. Thank you all.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect. Have a great rest of your day.