Minerva Neurosciences Inc (NERV) 2016 Q3 法說會逐字稿

Welcome to the Minerva Neurosciences third-quarter 2016 conference call. (Operator Instructions). This call is being webcast live on the investors section of Minerva's website 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.

Good morning. A press release with the Company's third-quarter financial results became unavailable at 7:30 AM Eastern time today, and can be found on the investors section of our website. 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 website 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, Chief Financial Officer, and Chief Business 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 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 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 Securities and Exchange Commission, including our quarterly report on Form 10-Q for the quarter ended September 30, 2016, filed with the Securities and Exchange Commission on November 3, 2016.

Any forward-looking statements made on this call speak only as of today's date, Thursday, November 3, 2016, 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.

Thank you, Bill, and good morning, everyone. Thank you for joining us today. Today I will focus primary on the positive clinical data from the six months extension of our Phase IIb trial with MIN-101 carried out in patients with negative symptoms of schizophrenia. These data were announced just last week, and marked an important milestone of our compound for patients suffering from schizophrenia and other disorders with debilitating negative symptoms, and for Minerva Neurosciences and its shareholders.

I will also discuss the next planned steps in the development plan for MIN-101, now that we have this newest data in hand, allowing us to prepare for Phase III. Finally, I will touch upon our other molecules: MIN-117 for major depressive disorders, MDD; MIN-202 for insomnia and MDD; and MIN-301 for Parkinson's disease.

Turning to MIN-101. On October 25, we announced positive findings from the six months extension of our Phase IIb trial of MIN-101 monotherapy in schizophrenic patients suffering from negative symptoms that severely impair their everyday functioning. The extension phase was a 24-week, open-label period that followed the 12-week randomized, double-blind, placebo-controlled core phase of the trial.

Results from the core phase were announced last May. They showed that the trial met its primary endpoint with statistically significant improvement in negative symptoms, as measured by the PANSS pentagonal structure model, PSM. Statistical significance was also achieved in multiple secondary endpoints that included overall general psychopathology, cognition, and overall functioning.

Data generated during the open-label extension were intended to provide supportive evidence of efficacy maintenance and/or further improvement when treating patients over a long period of time. In addition to the assessment of efficacy, this extension phase was intended to further confirm the safety and tolerability of the drug after several months of administration.

Today, we are pleased and excited to discuss this new extension phase data. These data demonstrate a further and continuous improvement in negative symptoms as measured by the negative symptom subscales of the positive and negative syndrome scale, PANSS.

The clear take-home message from this new data is that the longer patients are on monotherapy with MIN-101, the greater improvements they are observed to experience in their negative symptoms during the entire extension period, without evidence of reaching a plateau after nine months of MIN-101 administration. We believe that such continuous improvement in symptoms over a nine-month period in this patient population is unprecedented.

The data also provide an extended safety profile for MIN-101, consistent with that observed during the core double-blind phase of the trial. MIN-101 was reported to be well tolerated at both doses, 32 milligram and 64 milligram, over the entire 36-week duration of the study.

Importantly, positive symptoms remained stable through the extension period, as measured by the PANSS positive symptom subscale score. Improvements in overall schizophrenic psychopathology were also observed, as measured by the PANSS general psychopathology subscale and the total PANSS score.

All of these concomitant effects of MIN-101 monotherapy, in addition to its effects on negative symptoms and its good safety and tolerability profile, suggest that MIN-101 has the potential to address the unmet needs of schizophrenic patients.

I would now like to review specific data points. Patients who completed the core phase work provided the opportunity to enter into a 24-week open-label extension phase. During the extension phase, all patients received either 32 milligram or 64 milligram of MIN-101. Placebo patients in the core study were randomized to one of these two doses. 142 patients from the treatment and placebo groups in the core phase entered the extension phase, with 88 patients completing the extension. 70 patients received 32 milligram, and 72 patients received 64 milligram during the extension.

As I mentioned, negative symptoms, assessed based on the PANSS PSM, were observed to continue to improve during the extension phase, with a reduction from the study's start for the 32 milligram and 64 milligram treated groups of 5.5 points and 4.9 points, respectively.

This reduction is confirmed by a reduction of 5.4 points and 5.3 points, respectively, when the PANSS negative score is calculated using the three factors negative symptoms subscale. Positive symptoms were observed to remain stable throughout the study. General psychopathology was observed to improve during the extension phase for the 32 milligram and 64 milligram groups, as shown by reductions in the PANSS general psychopathology subscale score.

MIN-101 was generally reported to be well tolerated throughout the entire 36-week period. QTcF, a measurement of cardiac function, was closely monitored throughout the study. Discontinuation criteria based on QTcF prolongation were incorporated in the protocol. As previously announced, two patients out of 162 who received MIN-101 in the core phase were discontinued based upon these criteria. Both of these patients receive the higher dose, 64 milligram. In the extension phase, no additional patients were discontinued.

The extension data also confirmed that MIN-101, at the doses tested, did not have an effect on extra-pyramidal symptoms, EPS; prolactin levels; and weight. Taken together, these results I have summarized further confirm that the effect of MIN-101 on negative symptoms is a direct and specific effect.

Combined with the statistically significant data from the randomized, double-blind, placebo-controlled, 12-week core phase, the extension data paves the way towards Phase III testing of MIN-101 as a novel, differentiated treatment for the large worldwide population of schizophrenic patients with negative symptoms. These symptoms represent the most significant unmet need for these patients; and, thus, contribute substantially to the poor quality of life and functional outcomes.

With these data in hand, we intend to meet with the US FDA to determine the late stage clinical strategy and, more specifically, the design of the next clinical trials with MIN-101. As we speak, our team is working on the preparatory work for late stage development.

In terms of CMC, scale-up is ongoing. And in terms of clin pharm, several studies have been initiated or are ready to be initiated soon. Our objective is to initiate pivotal efficacy trials in mid-2017. We look forward to finalizing our plans for the clinical advancement of MIN-101, pending discussions with regulatory authorities.

Finally, we have submitted for publication, in a peer-reviewed journal, the results obtained in the double-blind core phase. We will also present several posters at the American College of Neuropsychopharmacology, ACNP, annual meeting in early December. During this meeting, we will detail additional analysis we have performed on core phase data. One of our abstracts will be featured in an oral presentation of data from the core phase of the MIN-101 trial at this prestigious conference.

Moving to MIN-117. MIN-117 is Minerva's compound for the treatment of MDD. Earlier this year, we announced positive data from a Phase IIa trial in Europe in this indication with this compound. In September, we announced that the FDA has accepted the Company's investigational new drug, IND, application for MIN-117. FDA acceptance of this IND allows us to begin clinical trials with this compound in the US, building upon the results of the Phase IIa trial.

We are evaluating the next steps in the development of MIN-117 as a treatment for MDD, based on its potential differentiation from existing therapies. These include the potential of early onset, efficacy on symptoms of both MDD and anxiety, lack of impairment in cognition and sexual function, and preservation of sleep architecture and continuity.

These attributes may also pave the way to test MIN-117 in other indications with unmet needs, for example, generalized anxiety disorders, GAD. The late stage development strategy of MIN-117 is currently being finalized and will be presented soon.

Turning to MIN-202. Our third clinical stage product is MIN-202, a selective orexin-2 receptor antagonist, and a co-development with Janssen Pharmaceutica NV. Janssen and Minerva are conducting a number of supportive activities in anticipation of the next phase of clinical trials in insomnia disorder and major depressive disorder, which are anticipated to begin in early 2017.

And finally, MIN-301. MIN-301 is our pre-clinical product candidate, a peptide that targets the extracellular domain of neuregulin-1 beta-1 activating ErbB4. MIN-301 is under development as a treatment for Parkinson's disease. We are pursuing the next planned steps in this program, which includes a finding of an investigational new drug application in the US, or an investigational medicinal product dossier in Europe; and, pending acceptance by regulatory authorities, the initiation of Phase I clinical testing thereafter.

In summary, the expansion data I have reviewed solidify what was already a strong foundation for proceeding into Phase III trials with MIN-101. We view the continuous improvement in negative symptoms over a nine-month period as potentially transformational for schizophrenic patients suffering from these extremely debilitating symptoms. In the coming months, we plan to meet with regulatory authorities prior to finalizing our plans for Phase III.

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

Thank you, Remy. We issued a press release earlier this morning summarizing our operating results for the third quarter ended September 30, 2016. A more detailed discussion of our results may be found in our quarterly report on Form 10-Q filed earlier today.

At September 30, 2016, the Company's cash, cash equivalents, and marketable securities were approximately $91.9 million, compared to $32.2 million as of December 31, 2015. As we stated on the last quarterly call, we expect that our financial resources will be sufficient to fund operations into 2018.

Research and development expenses were $5.9 million in the third quarter of 2016 compared to $3.8 million in the third quarter of 2015. For the nine months ended September 30, 2016, R&D expenses were $13.9 million compared to $12.3 million for the nine months ended September 30, 2015.

Excluding stock-based compensation, total R&D expense related to drug development programs for the three months ended September 30, 2016 and 2015, was $5.6 million and $3.6 million, respectively, an increase of $2 million. This increase in R&D expenses primarily reflects higher development expenses under the MIN-202 program for Phase II clinical trial preparation, partially offset by lower costs for our MIN-101 and MIN-117 programs, as both clinical trials have concluded.

Excluding stock-based compensation, total R&D expense related to drug development programs for the nine months ended September 30, 2016 and 2015, was $13.2 million and $11.9 million, respectively, an increase of $1.3 million. This increase in R&D expenses primarily reflects higher development expenses under the MIN-202 program for Phase II clinical trial preparation, increased expenses related to our Phase IIa clinical trial of MIN-117, and increased expenses related to our MIN-301 development. This was partially offset by decreased expenses due to the completion of our Phase IIb clinical trial of MIN-101.

General and administrative expenses were $2.4 million in the third quarter of 2016 compared to $1.9 million in the third quarter of 2015. For the nine months ended September 30, 2016, G&A expenses were $7 million compared to $5.6 million for the same period in 2015.

G&A expense in the three months ended September 30, 2016 and 2015, included non-cash stock-based compensation expenses of $0.7 million and $0.4 million, respectively. Excluding stock-based compensation, G&A expense for the three months ended September 30, 2016 and 2015, was $1.7 million and $1.5 million, respectively. This increase was primarily due to an increase in professional fees during the three months ended September 30, 2016.

G&A expense in the nine months ended September 30, 2016 and 2015, included non-cash stock-based compensation expenses of $1.8 million and $1.1 million, respectively. Excluding stock-based compensation, G&A expense for the nine months ended September 30, 2016 and 2015, was $5.2 million and $4.5 million, respectively. This increase was primarily due to an increase in personnel costs and professional fees during the nine months ended September 30, 2016.

Net loss was $8.4 million for the third quarter of 2016 or a loss per share of $0.24 basic and diluted, as compared to a net loss of $5.9 million or a loss per share of $0.24 basic and diluted for the third quarter of 2015.

Net loss was $21.6 million for the first nine months of 2016 or a loss per share of $0.71 basic and diluted, as compared to a net loss of $18.6 million or a loss per share of $0.81 basic and diluted for the first nine months of 2015.

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

(Operator Instructions). Jason Butler, JMP Securities.

Congrats on the positive data for 101. Remy, just first question, as you are thinking about moving forward into the next study, the Phase III program for 101, are you focused on both doses that you looked at in Phase II? Or would you only focus on one dose for Phase III?

Thank you, Jason. Clearly, we are focusing on moving forward the two doses, knowing that the pivotal dose is probably 32 milligram. But we are really focusing on moving forward with two doses, because in a Phase III program you have at minimum to test two doses, so we are focusing on the two we have.

Okay, great. Again, thinking about the Phase III trial design, can you maybe put into context for us the trial or the data we saw for Vraylar earlier this year in negative symptoms, and the benefit there? And how you think about the trial design relative to that trial in terms of duration, patient population, and endpoints?

I think if you allow me a comment, we have, first of all, to see if the results obtained are -- specifically effects on negative symptoms -- [are not so]. So I think the only way to show that you have specific effects on negative symptoms is a trial where you have to compare your molecule to placebo. Because if you are comparing your molecule to another molecule, inducing some side effects like EPS, or having an impact on other symptoms outside negative symptoms, you cannot come to the conclusion that this is a specific effect.

So, what we are planning to do is really to move forward again to test our molecule at the different doses we are planning to use versus placebo. The duration is, at minimum, three months double-blind phase. We are planning to have an extension of the proposals -- an extension to the patients which will go up to 12 months, but clearly we will test our molecule versus placebo.

Now, in terms of endpoints, we still will stay with the PANSS negative score. We are currently evaluating the different ways to calculate the negative score. There is obviously the standard way, which is coming out from those three factors. But we know very well that for these seven items to constitute the negative score, two are definitely not describing negative symptoms.

This is the reason why we went with the pentagonal model from White. But there is also the pentagonal model from Steve Marder, which is another way to evaluate the negative symptoms. And so, as we speak, we are really working on this post-hoc analysis in order to select the best endpoint. But definitely it will come out from the PANSS.

Okay, great. And then just last question on MIN-202. Can you just talk about the partnership with Janssen and the cost responsibilities for the next studies, if they've been determined yet?

Morning, Jason. This is Geoff. So, we're in the process of designing the next stage of this program. As you know, in the co-development agreement, there are two stages of development. There's an initial stage, which we've now passed. We passed that in July of this year, and we're now into the second stage. Minerva's expenses are capped at $19 million through to the end of a Phase IIb study in this second stage.

Now, which company will do each study is currently being discussed and organized. So the exact allocation of responsibility and cost in the program is not yet finalized, but what we do know is is that we won't be paying any more than $19 million.

Okay, great. Thanks for taking the questions and, again, congrats on the 101 data.

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

Thank you, everybody, to have joined the call today; and really looking forward to update you on Minerva in the future. Thank you again.

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