Minerva Neurosciences Inc (NERV) 2018 Q1 法說會逐字稿

Welcome to the Minerva Neurosciences First Quarter 2018 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 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 2018 financial results became available at 7:30 a.m. 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 website at www.sec.gov.

Joining me today on the call today from Minerva are Dr. Rémy Luthringer, Executive Chairman 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 that are more fully detailed under the caption Risk Factors in our filings with the SEC, including our annual report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 3, 2018. Any forward-looking statements made on this call speak only as of today's date, Thursday, May 3, 2018, 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 Rémy Luthringer.

Thank you, Bill, and good morning, everyone. Thanks for joining us today. With the recent initiation of our Phase IIb trial with MIN-117, Minerva has now moved the 3 programs into late-stage development. The most advanced program is MIN-101, now called roluperidone, for the treatment of negative symptoms in schizophrenia, which remains a significant unmet medical need. At the end of last year, we initiated the pivotal Phase III trial with roluperidone. We have prioritized the initiation of U.S. sites, and I am pleased to report that they have been actively enrolling patients during the first quarter. More recently, a number of European sites have been initiated. Approximately 500 patients will be enrolled at approximately 60 clinical sites in the U.S. and Europe, with about 30% of patients coming from the U.S. We expect to have the top line results from the trial in the first half of 2019.

As discussed during our recent key opinion leader event in New York, a recent survey of psychiatrists ranked negative symptoms as a principal unmet medical need for patients suffering from schizophrenia. Roluperidone is under development to be the first drug approved to target the symptoms in this patient population. Negative symptoms stays with the majority of schizophrenia patients for life. These symptoms severely limit their ability to lead productive lives and result in an emotional burden to themselves and their families as well as a significant economic burden to society.

In contrast, positive symptoms, which are the main focus of currently available treatments, are episodic. They present only intermittently in patients with schizophrenia. Currently, approved therapies for positive symptoms mediate the therapeutic effect primarily by blocking dopamine transmission. The blockade of the dopamine system in the brain induces not only side effects, such as weight gain, sedation, extrapyramidal symptoms and prolactin increase but often increases the burden of negative symptoms. The Phase III trial builds upon the results of our Phase IIb trial, which showed a statistically significant reduction in negative symptoms and, in parallel, improvement in multiple additional outcome measures. Consequently, the design of the Phase III trial aims to virtually replicate the findings of our successful Phase IIb trial. The Phase III trial is a randomized, double-blind, parallel-group, placebo-controlled 12-week study to evaluate the efficacy and safety of 32 milligrams and 64 milligrams of roluperidone in adult patients. The 12-week treatment period is followed by a 40-week open-label extension period, during which patients on drug during the double-blind phase will continue receiving their original dose. Patients on placebo will be randomized to receive either 32 milligrams or 64 milligrams of active drug. The primary endpoint is a change from baseline in negative symptoms using the Positive and Negative Syndrome Scale and Marder's Negative Symptoms Factor Score, NSFS, over the 12-week double-blind treatment period.

Moving on to MIN-117, we announced the initiation of a phase IIb trial in MDD in early April. The primary objective of the trial is to evaluate the efficacy of 2 fixed doses of MIN-117, 5-milligram and 2.5-milligram, compared with placebo in reducing the symptoms of depressed mood as measured by the change in the Montgomery-Asberg Depression Rating Scale total score over a 6-week treatment period.

Secondary objectives include: assessment of the change from baseline in symptoms of anxiety using the Hamilton Anxiety Scale; the change in severity of illness using the Clinical Global Impression of Severity Scale and Clinical Global Impression of Improvement Scale; and safety over 6 weeks of treatment. Approximately 324 patients are expected to be enrolled in this trial at around 40 sites in the U.S. and Europe. The study design includes a screening phase, a 6-week double-blind treatment phase and a 2-week post-study follow-up period. Top line results are expected in the first half of 2019. The study population will consist of adults with a diagnosis of moderate or severe MDD without psychotic features and with at least moderate levels of anxiety. We believe that patients suffering from depressed mood, who also have some symptoms of anxiety may benefit from treatment with MIN-117, as observed in previous Phase IIa clinical findings and based on the pharmacological profile of the molecule.

While existing therapies for MDD are available, meta-analysis show that their therapeutic effectiveness is limited and does not benefit all patients with a diagnosis of depression. Furthermore, due to side effects, particularly cognitive impairment and sexual dysfunction, existing therapies are often discontinued prematurely by patients. For these reasons, in addition to the primary effect on mood observed in our previous trial, we plan to carefully assess anxiety, cognition, sexual function, sleep and onset of action to further define the product profile of MIN-117 as an agent that can potentially address these shortcomings. We believe these findings may also help us design a data-driven Phase III development plan.

Seltorexant, also known as MIN-202, is the third late-stage clinical product under development with Janssen Pharmaceutica for the treatment of insomnia disorder and MDD. Seltorexant is a selective orexin-2 receptor antagonist. The orexin system in the brain is known to be involved in the control of several key functions, including metabolism and vigilance. Prior research as well as previous data generated with this molecule show that the orexin-2 sub-receptor is the most specific pathway involving the control of the sleep-wake cycle and, thus, may be a significant target to improve insomnia, depression and mood symptoms.

Three Phase IIb clinical trials have been initiated with seltorexant to expand upon earlier clinical data on both indications. Two of these trials are in MDD and one is in insomnia disorder. In the first MDD trial, approximately 280 patients are planned to be enrolled at clinical sites in the U.S., Europe and Japan. In the second MDD trial, approximately 100 patients are planned to be randomized at clinical sites in the U.S. The insomnia trial is expected to enroll a total of approximately 360 patients at clinical sites in the U.S., Europe and Japan. These trials are planned for completion in 2019.

For MIN-301, our preclinical candidate studies are ongoing to allow this molecule to enter clinical development. In addition to these studies, MIN-301 has already been tested in Parkinson's disease animal models. We currently continue to explore indications in the space of additional neurodegenerative disorders.

In summary, 2018 is a year of diligent execution of all of our clinical trials in order to ensure that we give ourselves and our patients the best chance of success in 2019. In parallel, we continue to conduct market research to determine the market potential of our molecules, particularly roluperidone. We are also moving forward on preparatory work for the filing of a new drug application, NDA, for roluperidone in anticipation of a positive Phase III study and also launch strategy for this molecule.

I would now like to turn the call over to Geoff.

Thank you, Rémy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter ended March 31, 2018. A more detailed discussion of our results may be found in our quarterly report on Form 10-Q filed with the SEC earlier today.

Cash, cash equivalents, restricted cash and marketable securities as of March 31, 2018, were approximately $121.1 million. The company believes that its existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months from today and into early 2020 based on our current operating plan. The assumptions upon which this estimate is based are routinely evaluated and may be subject to change.

Research and development expenses were $8.4 million in the first quarter of 2018 compared to $7.6 million in the first quarter of 2017. The increase in R&D expenses primarily reflect higher development expenses for the Phase III clinical trial of roluperidone and the Phase IIb clinical trial of MIN-117. These amounts were partially offset by lower development expenses for the seltorexant program due to the amendment of the company's co-development and license agreement with Janssen. We expect research and development expenses to increase during 2018 as we increase patient enrollment and related support activities for the roluperidone and MIN-117 trials.

General and administrative expenses were $4.3 million in the first quarter of 2018 compared to $2.9 million in the first quarter of 2017. This increase in G&A expenses was primarily due to an increase in noncash stock-based compensation expense and salary costs from increased staffing to support our pre-commercial activities. We expect general and administrative expenses to increase during 2018 as we begin to invest in the infrastructure necessary to support the company's growth. Net loss was $12.4 million for the first quarter of 2018 or a loss per share of $0.32 basic and diluted compared to a net loss of $10.6 million for the first quarter of 2017 or a loss per share of $0.30 basic and diluted.

Now I'd like to turn the call back to the operator for any questions.

(Operator Instructions) Our first question comes from the line of Jason Butler of JMP Securities.

It's Roy in for Jason. Thanks for taking the questions. I guess my first question is, Rémy, you mentioned some of the market research that you're doing for roluperidone, and I know some of it was presented at the recent KOL event. Just wondered if you can discuss in a bit more detail your current thoughts on the market opportunity, and if you expect that to evolve or if it is evolving at all.

Thank you. Rémy speaking here. I think I will give this to Rick, who is also on the call, and he can give you a little bit more granularity on all of this. But it's a very important question, and it's something we are really contemplating very carefully currently. But Rick, please?

Yes, thank you, Rémy, and good morning. So at the KOL event, we mentioned what we think is a very significant population that experiences negative symptoms who are clinically stable with positive symptoms. Or just to take you back to some of those numbers, we know there's about 1.4 million patients in the U.S. that are diagnosed and treated and almost 750,000, or almost half of them, are clinically stable and have persistent or predominant negative symptoms. And what was interesting is -- and in terms of advancing our assessment of the commercial opportunity, we recently surveyed 150 psychiatrists in the U.S., these are prescribers that see patients with schizophrenia. And what they're telling us is that, that population -- they're confirming that, that population exists, that there's a high unmet need. They're looking for therapies to treat these patients. And when exposed to the clinical data that we've generated thus far and that we're planning to replicate in the Phase III, they were indicating that they're likely to use roluperidone in that patient population. So that is, of course very, very exciting for us.

Okay, great. And then just kind of an out-of-the-box question, I guess, but the Phase II for MIN-117 is expected to be on the first half of next year, maybe the same time as the 202 trials. Any potential for synergies if both those agents are successful in MDD?

So this is obviously a great question, yes, but I think we -- as you know, I mean, mood disorder is a very, how to say, heterogenous population, yes? So definitely, the symptoms you -- the clinician will see in the symptoms, I mean, the patient is suffering from are very similar. But I mean, you have really different population. And I mean, without going into too much details, but I mean, you have definitely depressions where I mean people are reacting to life events, stress at work, stress in the family. And so this is I think a population who is responding quite well to existing therapies. Afterwards, you have a part of the population who are partial responders and they are really not really responding well and they're not going back to normal mood when they are treated with the current therapies. And at the end of the day, you have also really what we call the resistant patients, where probably -- and this was called endogenous depression before we went to DSM and we called this MDD, yes? So just to say that, I mean, you have different types of patients suffering from depression with probably a different biological background and, which is important, would need a different treatment. So all this said, I think the idea with 202, with seltorexant, is really to go after the patients who are not responding well to the existing therapy, so partial responders, yes? And as you know, obviously, sleep is an important component of depression, but as you know also, what we have seen with this molecule is that we have not only an improvement of insomnia or sleep or the sleep-wake cycle in these patients, but due to the mechanism of action of this molecule, we have also an effect which is really a direct effect on mood. So I mean, the rationale to go to this kind of population is really important. And as you know, the current treatment are, what we call, enhancement therapies, where I mean, you're going with an existing antidepressant and you give low doses of antipsychotics with all the potential side effects. So really -- I mean, this is really the sweet spot of 202. Now speaking about 117, I think this molecule has such a unique pharmacology that you can think about a lot of potential sweet spots in the space of mood disorders. And I mean, what is clear is that -- I mean, I think 117 is a very effective antidepressant. In the Phase IIa, we have seen that, I mean, even compared to standard of care, we have a better -- full response rate with 117. So you can really think that the MIN-117 is a molecule which can address even patients who are not responding at all to any other therapy. And last but not least, in this population, you have a lot of anxiety, and I mean, we have also seen an effect on anxiety; so you are really covering this population suffering from anxiety and mood disorders. And last but not least, if, I mean, you think that -- I mean, here, you have to deal with a chronic treatment, you'll need an extremely well-tolerated molecule, whereas the effect on cognition and sexual function is really not there, yes, or even that you have an improvement of these dimensions. And again, we have a very good data to show that 117 is definitely doing something positive in these different areas. So I think, really, I mean there is still a huge unmet medical need in mood disorders. Different types of unmet medical needs, and I think 117 and 202 are really covering 2 very important parts of the population who are currently not treated at all with existing therapies. Sorry, it was a long answer, but I think it's important. And thank you for asking this question because it's really important to understand that we have really, really still a lot of unmet medical need in the space of depression.

(Operator Instructions) Our next question comes from the line of Joel Beatty of Citi.

First one is -- and maybe it's a little bit too early to address this yet, but could you discuss for the 5

(technical difficulty)

2019 what the timing could be, a sense of -- or do you anticipate that there are certain trials that would read out earlier than others?

So, Joel, sorry, I mean, you broke up for, whatever, 5 seconds. So can you just repeat what was the reason of your question? I understood 2019, but I did not get the beginning.

Yes. Yes, sorry about that. So with the 5 trials reading out in 2019, do you anticipate that certain trials will read out before others?

So this is obviously an interesting question. And honestly, I mean, difficult to answer at the stage we are at. What I can say today is that all the 5 trials currently going on are moving according to plan. And I think we should keep the guidance that, I mean, the readout will be in the first half of 2019. This said, indeed -- I mean, obviously, some trials will read out earlier than the other ones, but I think we should keep this guidance. But I think the message here is that things are going well, patients are entering the study. And I think we're on target in terms of time lines, yes.

Great. And then maybe a slightly different question. I see in the press release roluperidone and 117 are guided to have results in the first half of 2019, but seltorexant is guided to have results, it just says, in 2019. So should we assume that seltorexant data is likely to come towards the end of 2019? Or is it possible that the results from those 3 seltorexant trials could also come in the first half?

I would not read this in the same way as you are reading it. I think we are just taking our precaution in order not to disappoint anybody. But again, the study is -- the studies are definitely on time. So honestly, Joel, I cannot give you more granularity. We are doing our homework, we are really very close to the investigators and to the teams around the investigators in order to have them focused on our trials. Again -- I mean, in some trials, things are going even better than expected, but I think I would not give more guidance at this stage. You'll have to give us a little bit of time to move forward with all these trials.

Got it. Yes, it make sense. And then with regards to cash, obviously, with 5 trials underway, expenses are increasing. Is there a way -- how do you think about expenses ramping up over the course of this year? Or perhaps, how long cash could last?

Yes, let me take that one, Joel. It's Geoff Race here, and thanks for the question. So as we guided in the call, we expect cash to last us into 2020. Of course, we have 5 fairly big studies running but of course, 3 of them are currently financed by Janssen in accordance with the amendment to the co-development and co-commercialization agreement that we penned with them with -- last year. So obviously, the roluperidone study is a big study. The 117 is also moving ahead. And cash burn will, of course, be correlated to the speed at which we recruit those studies. But clearly, over the last couple of years, we've spent around about $30 million per year on our clinical programs. And obviously, that rate is now increasing, as you can see from the cash burn rate in the first quarter of this year.

And then one last question. I think, clearly, there has been a lot of companies that have had interest in negative symptoms of schizophrenia in the past. And those drugs have all failed to date. One of the things that's unique about your program is that it's a monotherapy trial, whereas typically the trials in the past have been add-on therapies. Can you discuss the importance of that distinction?

This is a great question, yes, and I'm really happy that you asked this question, yes, Joel. So I think there are two aspects here, yes. I mean, first of all, and as Rick mentioned, there is definitely a population out there, which is a significant part of the population of patients with a diagnosis of schizophrenia, who do not need any antipsychotic, but need a treatment to improve negative symptoms, cognition and in order to allow them to function well. So this is definitely a population out there. There is a population obviously who has some positive flares and positive episodes of agitation. And here, you need obviously a treatment which is helping them to calm down, if you allow me this word, from this positive episode. All this said, I mean, if you want to get the approval of a drug for negative symptoms showing a specific effect on negative symptoms, you know you have to design the right trial. So this is a different aspect, this is not speaking about any population at the end of the day which is treated with a drug, but I mean about getting the claim of a specific effect on negative symptoms. And here, it is interesting that I think now KOLs, I think also that the agencies, FDA, EMA, agree that the only way to demonstrate that you have a specific effect on negative symptoms is to do this in monotherapy. And second, you need to have as a controlled placebo. Why? First of all, there is no approved drug for negative symptoms, which obviously is making quasi-impossible to have a positive comparator. And second, I think in order to claim that you have a specific effect on negative symptoms, you need to, how to say, to have a control which is not modifying confounding factors like positive symptoms, like EPS. And as you know, when you go with an antipsychotic, you have all these side effects which, by the way, are picked up by the PI. And I mean, at the end of the day, you have a [bias] in your trial. But I mean, you can only do the trial versus placebo in order to demonstrate that you have a specific effect with your drug. So this is all what we have done in the Phase IIb and obviously, with the results you know; and this is the reason why I think we got the blessing to do the same in the Phase III. And based on these 2 trials, which are really powered to be registrational trials, I think we will be at a stage where we can file an NDA. So I think there are 2 aspects, patient populations and, at the end of the day, the way you're redeveloping your drug in order to get the approval of a specific effect on negative symptoms.

And I'm showing no further questions at this time. I'd like to hand the call back over to Rémy Luthringer for any closing remarks.

So thank you so much for being with us today. And I'm really looking forward to updating you in the very close future. Thank you, again.

Ladies and gentlemen, thank you for participating in today's conference. That does conclude today's program. You may all disconnect. Everyone, have great day.