Minerva Neurosciences Inc (NERV) 2018 Q2 法說會逐字稿

Welcome to the Minerva Neurosciences Second Quarter 2018 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 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 second 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 on the call today from Minerva are Dr. Remy Luthringer, Executive Chairman and Chief Executive Officer; Mr. Geoff Race, Executive Vice President, Chief Financial Officer and Chief Business Officer; and Mr. Rick Russell, President.

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 quarterly report on Form 10-Q for the quarter ended June 30, 2018, filed with the SEC on August 2, 2018. Any forward-looking statements made on this call speak only as of today's date, Thursday, August 2, 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 Remy Luthringer.

Thank you, Bill, and good morning, everyone. Thanks for joining us today. Minerva is fully engaged in the conduct of 5 late-stage clinical trials with 3 innovative product candidates, designs to address significant unmet needs in large CNS markets. These products include roluperidone, MIN-101, for the treatment of negative symptoms in schizophrenia; seltorexant, MIN-202, for the treatment of insomnia disorder and major depressive disorder, MDD; and MIN-117 for the treatment of unsure depressive disorders.

I would like to begin with our lead product roluperidone. It's an ongoing pivotal Phase III trial with this compound, is proceeding well, and we'll enroll approximately 500 patients at approximately 60 clinical sites in the U.S. and Europe. About 30% of these patients are expected to come from the U.S. The trial is a randomized, double-blind, parallel-group, placebo-controlled 12-week study to have already efficacy and safety of 32 milligrams and 64 milligrams of roluperidone in other patients. The 12-week treatment period will be followed by a 40-week open label extension period during which patients on drug during the double-blind phase will continue to receive their original dose, while patients on placebo will be randomized to receive either 32 milligram or 64 milligram of active drug. The primary end-point is a change from baseline negative symptoms using the Positive and Negative Syndrome Scale, PANSS, Marder Negative Symptom Factor Score, NSFS, over the 12-week double-blind treatment period.

Key secondary endpoints include a Personal and Social Performance scale, PSP, and Clinical Global Impression of Severity, CGI. The design of this trial is fundamentally consistent with that of our successful Phase IIb trial. We are seeking to replicate the statistically significant improvements in negative symptoms and additional secondary outcome measures observed in the trial. Our priority focus is on the day-to-day conduct of the Phase III trial. We're working closely besides in Europe and in the U.S. to monitor operations and adherence to keep parameters of this trial. This include, for example, careful patient selection based on defined negative symptom criteria and monitoring of sites and investigators to ensure data integrity and quality.

We're also moving forward on substantial preparatory work for the filing of a new drug application, NDA, for roluperidone in anticipation of a positive Phase III study and on the launch strategy for this molecule. We expect to read out data from the 12-week double-blind treatment period in the first half of 2019.

Moving onto MIN-117. We announced the initiation of a Phase IIb trial with this compound in MDD patients with anxiety symptoms in April. The primary objective of this trial is to evaluate the efficacy of 2 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 from baseline in the Montgomery-Asberg Depression Rating Scale, MADRS, total score over a 6-week treatment period.

Secondary objectives include one, assessment of the change from baseline in symptoms of anxiety using the Hamilton Anxiety Scale, HAMA; second, the change in severity of illness using the Clinical Global Impression of Severity scale, CGIS, and Clinical Global Impression of Improvement scale, CGII; and third, safety over 6 weeks of treatment. In addition to these measurements, we also plan to assess cognition, sexual function, sleep and onset of action in terms of mood improvement. Approximately 324 patients are expected to be enrolled in this trial at about 40 sites in the U.S. and Europe.

The study design includes a screening phase, a 6-week double-blind treatment phase and the 2-week post-study follow-up period. We are enrolling adults with the diagnosis of moderate or severe MDD without psychotic features and with at least moderate levels of anxiety. Based on our previous Phase IIa clinical findings and the pharmacological profile of the molecule, we believe that these patients may benefit particularly from treatment with MIN-117. Top-line results are expected in the first half of 2019.

Our third late clinical stage product is seltorexant, also known as MIN-202. We're co-developing this compound with Janssen Pharmaceutica for the treatment of insomnia disorder and MDD. Three Phase IIb clinical trials are ongoing with seltorexant, 2 in MDD and one in insomnia disorder. These trials are planned for completion in 2019. In the first MDD trial, approximately 280 patients are planned to be enrolled at more than 85 clinical stage in the U.S., Europe, Russia and Japan. This trial will include a 4-week screening period, a 6-week double-blind treatment period, and a 2-week follow-up period. The primary objective is a change from baseline to week 6 in the Montgomery-Asberg Depression Rating Scale.

In the second MDD trial, approximately 100 patients are planned to be randomized at about 34 clinical sites in the U.S. This trial will include a 4-week screening period, a 6-month double-blind treatment period and the 2-week follow-up period. The primary objective is to assess the efficacy of flexibly dosed seltorexant compared to flexibly dosed quetiapine as adjunctive therapy to a baseline antidepressant in delaying time to all-cause discontinuation of study drug.

The insomnia trial is expected to enroll a total of approximately 360 patients at clinical sides in the U.S., Europe and Japan. This trial will have a duration period of up to 61 days, including screening and follow-up. The primary objective is to assess those response of 3 doses of seltorexant compared to placebo on-sleep onset as measured by latency to persistent sleep, LPS, using polysomnography, PSG.

Finally, we are advancing a number of preclinical studies with MIN-301. We believe this protein-based investigational drug has disease-modifying potential for the treatment of unmet medical needs in Parkinson's disease and other neurodegenerative indications.

To summarize, we are highly focused on clinical trial execution in 2018. We believe each of our clinical-stage products has a potential to be highly differentiated from currently approved therapies in their respective target indications. Importantly, we are well capitalized and believe we have sufficient capital to fund operations through data read-outs from all of the trials I have described.

Geoff will now describe our financial in greater details.

Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the quarter ended June 30, 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 June 30, 2018, were approximately $108.6 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 $9.1 million in the second quarter of 2018 compared to $7.1 million in the second quarter of 2017, an increase of $2 million. This increase primarily reflects higher development expenses for the Phase III clinical trial, the 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 our co-development and license agreement with Janssen.

For the 6 months ended June 30, 2018, R&D expenses were $17.5 million compared to $14.8 million for the 6 months ended June 30, 2017, an increase of $2.7 million. This increase primarily reflects higher development expenses for the Phase III clinical trial for roluperidone and the Phase IIb clinical trial of MIN-117. These amounts were also partially offset by lower development expenses for the seltorexant program due to the amendment to our co-development and license agreement with Janssen.

We expect R&D expenses to increase during 2018 as we increase patient enrollment and related support activities for the roluperidone and MIN-117 clinical trials. General and administrative expenses were $3.9 million in the second quarter of 2018 compared to $2.6 million in the second quarter of 2017, an increase of approximately $1.3 million. This increase was primarily due to an increase in non-cash stock-based compensation expenses and salary costs from increased staffing to support our pre-commercial activities. For the six months ended June 30, 2018, G&A expenses were $8.2 million compared to $5.5 million for the same period in 2017, an increase of approximately $2.7 million. This increase was primarily due to an increase in non-cash stock-based compensation expenses and salary costs from increased staffing to support our pre-commercial activities. We expect G&A expenses to increase during 2018 as we begin to invest in the infrastructure necessary to support the company's growth.

Net loss was $12.5 million for the second quarter of 2018 or a loss per share of $0.32, basic and diluted, as compared to a net loss of $9.8 million or a loss per share of $0.27, basic and diluted, for the second quarter of 2017. Net loss was $24.9 million for the first 6 months of 2018 or a loss per share of $0.64, basic and diluted, as compared to a net loss of $20.4 million or a loss per share of $0.57, basic and diluted, for the first 6 months of 2017.

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

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

First one, Remy, just on seltorexant and the MDD trial with quetiapine. Can you just talk a little bit more about the flexible dosing schedule, what actually can physicians do with the dose during the trial of both drugs?

Great question. So as I had explained, I think in a previous call, I mean, we are testing basically 3 doses and in [selto] trial, we are really having an interim analysis in order to see if it means 3 doses are doing the job. Obviously, all this is blinded and, if I mean, the lower dose is also doing the job as we expect. We will also test even a lower dose. So we are basically testing either 3 doses or 4 doses. All this is obviously to have the final dose range or the final doses to be moved towards Phase III development.

Great. That's helpful. And then for roluperidone, could you maybe talk about the commercial prep work that you're doing? And any thoughts you have on commercial strategy at this point? I know it's still some way ahead of the launch.

So I will give this over to Rick Russell, who is also connected, but I think basically what we're really doing here -- because we really think that this is an important molecule, it is addressing a real unmet medical need. It is also really changing the way you can think about treating the patients. We are doing indeed a lot of work in order to better understand the behavior of the prescriber of the KOL, think about this new approach and the results we have. And, I mean, we are really trying to really come up with a strategy, which is really addressing this unmet medical need because definitely there is a large population out there. So -- but maybe Rick, you can give more color on what you're doing currently?

Yes. Thanks, Remy. And Jason, so the main focus strategically is to really make sure that we have a very solid understanding of the market in terms of where we want to go in, what our entry position will be like and then how that will evolve over time. And to be a little bit more specific in terms of positioning, how we want to make sure that we come in and, of course, differentiate versus what else is out there, which I think will be fairly straightforward given that we have an effect on negative symptoms and other therapies don't, but in particular, how the doctors' view these patients and what patients are. Most likely, they'll be the ones that they would want to use roluperidone at first and then how will that either evolve over time. And in the context of negative symptoms, as you know, and I think we've talked about this before, there are number of different characteristics that are measured in the PANSS scale to describe the severity of negative symptoms. So other sub-scale items that are more important that we should be more focused on when we talk about the patients that will most benefit from roluperidone or not. So that gives you senses to kind of what we're working through right now strategically in terms of positioning for the molecule and then adoption sequencing over time and how that market will evolve.

And our next question comes from the line of Joel Beatty from Citi.

This is [Shawn] calling in for Joe. My first question is how does the effect on sleep for roluperidone compared to other antipsychotics and how that gives you confidence that it will be effective in the treatment of negative symptoms?

So this is obviously a great question, and as you know, this is one of my preferred topics. So I think the effect we have on sleep and, I mean, this has only been disclosed in some post-presentation on Minerva. We're currently working on putting this in a publication. But I mean -- so clearly what I mean, I think it's important when you want to improve the sleep of patients suffering from schizophrenia and at the end of the day has (inaudible) impact on the overall psychopathology. So you want really to, first of all, to treat the insomnia part because these patients are really the large majorities suffering from insomnia. But I think there is another important factor, which is also very well described in these patients, is that they have a real impairment of the sleep-wake cycle and of the circadian sleep cycle. So we know the different sleep cycles during sleep. And so clearly when you give a molecule which is blocking dopamine, we're basically sedating and we're basically having some effects on the insomnia part. But, I mean, the patients are not sleeping with the right biological reasons and (inaudible) reasons. What we have seen with our drive and what we hopefully will also see in the Phase III, because we're doing some recordings there as well, is really to demonstrate that we're normalizing, again, sleep-wake cycle and circadian reasons and ones possible out of sleep cycle would (inaudible) which is deep sleep, which is really lost when patients are not treated well. We also know that this restores a deep sleep, that is our molecule. So basically, we really hope to restore some physiological, biological reasons, including restoration of deep sleep. And long story short, as you know, deep sleep is heavily involved in memory consolidation, and we really believe that improving all these aspects of the sleep-wake cycle is really contributing to the overall effect we have seen with roluperidone.

That's very interesting. Kind of switching gears a little bit. Can you talk briefly on your clinical site monitoring and the steps you're taking to maintain data consistency from site to site?

Yes, absolutely, because biggest thing is really the key in the trial we are currently doing is because when you keep in mind the date obtained in our Phase IIb study, while you see that, I mean, the primary endpoint and all the secondary endpoints, including the social functioning measured by PSP, for example, and cognition box tail are all starting to be improved after 2 weeks, and this improvement is going on and is increasing over time. You're very, very confident that you have a drug which is really moving the needle here. So I think what is key is definitely to make sure that, I mean, in the Phase III, we have the right patients and we are doing the right measurement of the disease -- of the symptoms. And some of you are doing first. I mean, we have been extremely precautious in selecting the sites. So I can tell you that we have probably discarded or not selected 2 sites out of 3. So really only one site remained after having done a very careful check out of 3. So this is the first thing. We really -- and here, we have the chance to have extremely skilled people working at Minerva (inaudible) obviously working at Minerva, (inaudible) obviously, Professor Davidson, who has a long, long experience about these kind of patients and how to run trials. He's really making sure that, I mean, the sites and access to the history of the patient because this is obviously important to know the history because negative symptoms is a chronic part of the disease. So this is also an important work. And afterwards, what we are doing during the study, when we have really trained very carefully the PIs who are doing the scoring, we really help them by, first of all, providing them with a tablet, which is a tablet (inaudible) entering the scales and they have immediately a feedback about the coherence, about the scoring and they can really, how to say, think twice about the scoring. Obviously they keep the final decision, but I mean, it's really helpful to have an online check of what they're doing and that's at least what we're doing as well. We have completely blinded, we have access to the PANSS scales and to the other scales we're using in this study in order to see if all the sites are somehow in the normal distribution of how you should score this (inaudible). So if there is a discrepancy, we really are going back to train, decide again to make sure that they're going back to -- because there is a normal distribution of scorers. And last but not least, and I should stop here because it would be long, because we're doing a lot of precautions, but I mean, the last thing we're doing is (inaudible) site is definitely not recruiting over a certain period of time. We are definitely closing the site because sites who have little access to patients are not recruiting well, we should close them. I'm not saying that we have the case here in the study, I'm just saying that this is, as a rule, we have announced to the sites before starting that trial. So a lot of things which seems not to be important, maybe, but all put together gives us a quality of the data you will get from the study.

And then, for my final question, based on your discussions you've had with KOL, how long would a patient has to have stable positive symptoms before a clinician would feel comfortable prescribing roluperidone?

So maybe I can also give this to Rick, but, I mean, the answer is quite clear, I mean, when you're looking to the literature, I mean, you find out that, I mean, we have probably around 60%. I am speaking about literature, I personally believe that, I mean, negative symptoms are more present and probably present in most of the patients having the real diagnostic of schizophrenia, but basically 60% of the patients have really negative symptoms, which are impairing basically the functioning. So afterwards, yes, indeed, there comes a question, what is the percentage of this population, who is stable on positive symptoms. I think it's a significant part of the population. I don't think that anybody knows the exact number, but it's a really significant part of this population. But I think there is something which is important to mention here as well if you allow me. These are -- I mean, you need also to have the right pharmacology to control positive symptoms. And I think roluperidone has the right pharmacology because think one second that our molecule is a 5-HT2A antagonist and the Sigma-2 antagonist, and those mechanism of actions have a good rationale in terms of controlling hypo or hyper (inaudible) activity, which I spoke of the knowledge, of the field, is probably a driver for positive symptoms in agitation. So I mean, here, I think we are addressing in our studies the population who is quite stable in terms of positive symptoms. But in addition, we're also having a drug which is able to control positive symptoms or at minimum avoid that -- I mean, you have relapses. And I think our Phase IIb data are quite clear on this. When you're looking to the 9 months data we have, I mean, our patients stayed very stable and positive symptoms.

And our next question comes from the line of Biren Amin from Jefferies.

I noticed in the queue that 2002 -- I mean 202 was temporarily suspended in Q1 2018. Can you just talk a little bit about that and any potential impact to trial or trial enrollment?

So I didn't understand completely the beginning, but I guess you are speaking about the fact that, I mean, the study was for a certain period not recruiting. So the reason -- the reason was, as I said, I mean, there was a problem with the tablets, and obviously this has been picked up before any patient was receiving treatment. So this has been solved and what I can tell you is that, I mean, the things are completely back on track. This study and the two other studies on 202 are recruiting extremely well. So, as you know, we have been, and I am, always very cautious in terms of timeline. So definitely in the timelines we've announced, we're completely in this timelines because the 3 studies are recruiting extremely well.

Okay, great. And then just on the insomnia program, Remy, can you just tell us a little bit about what you hope to achieve with this 2005 trial. I think our primary endpoint is sleep onset. So just maybe -- just talk a little bit about what the clinical -- what I guess would be considered clinically relevant benefit in this trial?

Yes. So I mean, this study is obviously part of the overall strategy, yes, and this study is mostly addressing to those related effects because we have data and I probably think that you've seen the publication which came out on the Phase IIa study where we used 40 milligrams. We have also data with 20 milligram. So definitely, we know that these two doses are extremely effective, both in sleep induction and sleep maintenance. Here, I mean, the objective of this study is to double check obviously this, but also to explore lower doses in order to have all the information about the different doses which might be useful. But at the end of the day, the positioning of this molecule is obviously not only to find the right dose in order to induce sleep and maintain sleep. So here's -- the objective here, is to address unmet needs in population. So what I mean, the existing treatments are not very helpful. For example, there are many people who, as you know, are not tolerated at all -- tolerating at all, excuse me, diverging molecules. So here, I mean, this is definitely a target, but I mean, the biggest objective here is that we are helping people to go back to sleep or to normal sleep without disturbing the sleep architecture and continuity, which by the way, is the never the case with marketed molecules and to restore, what we say, restorative sleep. So in order to help patients to wake up and to cope with the everyday life result impairment. Positioning here is to address again populations (inaudible) existing treatments are not helpful and to demonstrate that our molecule preserve sleep and allows to have this restorative sleep which allows you to function well during the daytime.

And I'm showing no further questions over the phone lines at this time. I'd like to turn the call back over to Remy Luthringer for closing remarks.

So thank you, everybody, for listening today, and I'm really looking forward to update you very soon on our progress. Thank you again and have a nice day.

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