Minerva Neurosciences Inc (NERV) 2015 Q2 法說會逐字稿

Welcome to the Minerva Neurosciences second-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 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.

Good morning. A press release with the Company's first-quarter 2015 financial results became available at 7:30 A.M. 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, our 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; and whether and when, if at all, they will receive final approval from the US 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 and development efforts will be successful; our ability to achieve the results contemplated by our codevelopment agreements; management's ability to successfully achieve its goals; our ability to raise additional capital to fund our operations on terms acceptable to us; 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 Securities and Exchange Commission, including our quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the Securities and Exchange Commission on August 5, 2015. Any forward-looking statements made on this call speak only as of today's date, Wednesday, August 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 date except as required by law.

I would now like to turn the call over to 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 our belief that our compounds process, innovative 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 while 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 these randomized double-blind placebo-controlled trials will support the clinical advancement of these products in multiple regulatory jurisdictions.

Let me move now to our product candidates. Are lead asset is MIN-101, an innovative serotonin 5-HT2A and Sigma2 receptor antagonist which we are evaluating in schizophrenic patients with a history of negative symptoms. These symptoms persist chronically throughout an individual's lifetime and increase with severity over time, representing one of the major unmet needs of our 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 the potential to avoid the severe side effects of existing therapies, including sedation, extra-clinical symptoms, plasma production increase, metabolic disorders and weight gain.

Building on the Phase IIa results, we have moved forward with the Phase IIb study with MIN-01. Approximately 40 clinical sites have been initiated in six countries in this randomized double-blind power globe design study. We are exploring the effects of two doses of MIN-101, 32-milligram and 64-milligram 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 topline 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 under development to treat major depressive disorder through multiple mechanisms acting on several receptors associated with the control of mood. 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 than existing therapies and preserved 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 will compare the therapeutic impact of two doses of MIN-197, 4.5 milligram and 2.5 milligrams 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 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 and comorbid insomnia. We are developing this product with our partner, Janssen Pharmaceutica NV. Data from a 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. (inaudible) data from the Phase Ib study in MDD patients showed that the selective blockade of orexin-2 by MIN-202 not only accelerated sleep induction and prolonged sleep duration but, more importantly, also preserved physiological or restorative sleep. Preclinical and single ascending dose clinical data with MIN-202 resented by Janssen at the 29th Annual Meeting of the Associated Professional Sleep Society's SLEEP 2015 this past June. Janssen has dosed the first patient in a European Phase Ib study of MIN-202, JNJ-42847922, as 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 readout from both the 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 compound 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-301, a compound based on an investigation of extracellular domain of neuregulin-1B1 to treat Parkinson's disease. In this program, we are looking for a disease modifying therapy with the potential to treat a range of symptoms, not just motor impairment, with fewer side effects than current therapies. Early in 2015, we announced results from a nonhuman primate study showing that treatment with an analog of MIN-301 improved the range of symptoms associated with the Parkinson's disease model in primates. This finding complemented the beneficial effect of MIN-301 observed in non-primate preclinical models.

The next planned steps in the program are the filing of an IND in the US or an investigational medicine product dossier, IMPD, in Europe in 2016. And pending acceptance by regulatory authorities, the initiation of Phase I clinical testing thereafter.

We're building towards an exciting period of data readout expected in 2016. Such data has the potential to further validate the innovative mechanisms of action underlying our product candidates and to create the knowledge base necessary to move our compounds forward in clinical development. We're hopeful that this data will pave the way towards advanced clinical testing and eventually towards availability of new options for physicians and for patients suffering from debilitating diseases.

I will now turn the call over to Geoff to cover our financial results.

Thank you, Remy. Early this morning, we issued a press release summarizing our operational results for the second quarter of 2015. A more detailed discussion of our results may be found in our quarterly reports 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 million 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 total $4.3 million and $8.2 million respectively versus $1.6 million and $2.1 million 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 million and $6.1 million, respectively, primarily reflect increased expenses related to our Phase IIb clinical trial of MIN-01, our Phase IIa clinical trial of MIN-107 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 of 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 and 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 of $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 milestones.

Now I would like to turn the call over to the operator for any questions. Operator?

(Operator Instructions). Jason Butler, JMP Securities.

This is Harry [Jenk] 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?

Yes. By end of July, we were at 70 patients.

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

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

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

So, in fact, we go with a highly, I would say, documented history of the patients with physicians or investigators who know these patients since long. And we are checking the symptoms at present over the last three months. So these are the criteria to enter a patient into the screening phase.

Great. Thank you very much.

(Operator Instructions). Brian Skorney, Robert Baird.

A couple of quick ones. I guess, first, when you think about the trial design for the MIN-101 study, in the context of the reformulation, how should we be thinking about the 32- and 64-milligram doses on how they map relative to the 30-milligram BID dose exposures on the prior Phase II study? In other words, would you expect the 32-milligram or the 64-milligram arms to be most similar to what was previously explored?

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 Cmax of the parent compound and of some of the metabolites. So basically what we have in this trial, 64-milligram and 32-milligram, are really let us say can be compared to the previous trial, so 64-milligram compares to 32 BID in the previous trial, and 32-milligram in this trial is half of the dose size. It's really dose proportional. So equivalent for 64 and half for 32.

Got you. And on MIN-301, I was wondering maybe you could give us a little more clarity on the steps left to IND. Have you guys started your LT tox yet and are there any additional steps ahead of the LT tox that you still need to do before the IND?

So, we are preparing to file for the IND, so we have started some preclinical work in order to prepare the long-term tox studies.

Got you. And just in terms of -- this is a peptide, correct? What scale are you guys at right now and what additional manufacturing steps need to be taken to build up clinical material?

So, I didn't completely understand the question because the line was not good. But definitely it is a peptide. And we really have worked on the synthesis of this peptide or the production of this 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 the quantity necessary to run the preclinical program and the Phase I program.

Great. Thanks, guys.

(Operator Instructions). I'm showing no further questions at this time. I would like to hand the call back over to Remy Luthringer for any closing remarks.

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.

Ladies and gentlemen, this concludes today's presentation. Thank you once again for your presentation. You may now disconnect. Everyone have a great day.