Minerva Neurosciences Inc (NERV) 2021 Q2 法說會逐字稿

Welcome to the Minerva Neurosciences Second Quarter 2021 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 Communications at Minerva. Please proceed.

Good morning. A press release with the company's second quarter 2021 financial results and business updates 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 Securities and Exchange Commission 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; 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 quarterly report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC earlier today. Any forward-looking statements made on this call speak only as of today's date, Monday, August 2, 2021, 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. Following the completion of the open-label portion of the Phase III trial with roluperidone in schizophrenia, and the Type C meeting with the FDA, Minerva continues to work towards the submission of a new drug application in the first half of 2022. Towards that end, we have completed enrollment in a pivotal bioequivalent study with roluperidone in healthy volunteers. We also continue to make progress on assembling the components required to submit an NDA for roluperidone, including clinical pharmacology, nonclinical and CMC activities. We anticipate completing these activities over the coming months, and we look forward to continuing our dialogue with the FDA in anticipation of submitting a request for a pre-NDA meeting.

Let me begin with bioequivalence study. On April 23, 2021, we initiated subject screening in this study, conducted in healthy volunteers. The objective of this study is to compare the formulations employed in the Phase IIb and Phase III trials as well as at least one new formulation designed in conjunction with our commercial supplier to facilitate large-scale manufacturing. We are seeking to demonstrate similar drug exposure between the formulations. On June 29, 2021, we completed the enrollment of 48 subjects in this study. We look forward to reporting the top line results, which are expected in the third quarter of 2021.

In parallel with completing the bioequivalence study, we are working on additional activities required to support an NDA submission for roluperidone. These activities are informed by our interactions with the U.S. FDA since the Type C meeting last November. The rationale for NDA submission was strengthened by the findings from the open-label extension. In summary, these findings were supportive in several key areas. First, they demonstrated a specific and continuous improvement in negative symptoms among patients who received monotherapy with roluperidone throughout the duration of the 9-month open-label extension period as measured by the Marder negative symptom factor score. Second, this improvement was correlated with functional improvement as measured by the Personal and Social Performance scale. Third, the observed relapse rate of approximately 12% compares favorably with relapse rate of more than 25% to 30% seen in the schizophrenia literature. Finally, the extension data showed that roluperidone was well-tolerated with no weight gain, extrapyramidal symptoms, prolactin increased oxidation.

In summary, we believe that the completion of the bioequivalence study will represent an important component of the NDA package. We are encouraged by our ongoing interactions with the agency, and we believe we have addressed nearly all of the issues raised at our Type C meeting last November. We are also making excellent progress towards the completion of the NDA. Following a successful bioequivalence study, we plan to request a pre-NDA meeting with the FDA to discuss the NDA content and readiness for submission.

I will now turn it over to Geoff for the financial update.

Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the second quarter ended June 30, 2021. 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, 2021, were approximately $74.3 million compared to $25.5 million as of December 31, 2020. Our cash position was strengthened significantly in January 2021 with the receipt of a $60 million cash upfront payment from Royalty Pharma in connection with Royalty Pharma's acquisition of the company's Royalty interest in seltorexant. Under this agreement, Minerva has the potential to receive up to a further $95 million in additional payments contingent on the achievement of certain clinical, regulatory and commercialization milestones. We expect that the company's existing cash and cash equivalents will be sufficient to meet its anticipated capital requirements for at least the next 12 months based on our current operating plan. The assumptions upon which this estimate is based are routinely evaluated and may be subject to change.

For the 3 months ended June 30, 2021 and 2020, research and development expense was $5.5 million and $5.8 million, respectively, a decrease of approximately $0.3 million.

For the 3 months ended June 30, 2021 and 2020, noncash stock compensation expense included in R&D expenses was $0.6 million and $0.7 million, respectively.

For the 6 months ended June 30, 2021 and 2020, R&D expense was $8.8 million and $13.8 million, respectively, a decrease of approximately $5 million.

For the 6 months ended June 30, 2021 and 2020, noncash stock compensation expense included in R&D was $1.3 million and $1.4 million, respectively. The decrease in R&D expenses for both the 3- and 6-month periods ended June 30, 2021 versus the same periods in 2020 were primarily due to lower costs for the Phase III clinical trial of roluperidone, for which the 3-month core study portion of the trial was completed in May 2020.

For the 3 months ended June 30, 2021 and 2020, general and administrative expenses were $3.4 million and $5.9 million, respectively, a decrease of approximately $2.5 million.

For the 3 months ended June 30, 2021 and 2020, noncash stock compensation expense included in G&A was $0.7 million and $2.8 million, respectively.

For the 6 months ended June 30, 2021 and 2020, G&A expense was $7.7 million and $10.1 million, respectively, a decrease of approximately $2.4 million.

For the 6 months ended June 30, 2021 and 2020, noncash stock compensation expense included in G&A was $1.6 million and $4.3 million, respectively. The decrease in G&A expense for both the 3- and 6-month periods ended June 30, 2021, was primarily due to a decrease in noncash stock-based compensation. Stock-based compensation charges were higher in 2020 primarily due to the approval of certain option grants and certain severance-related benefits.

Net loss was $10.6 million for the second quarter of 2021 or net loss per share of $0.25 basic and diluted as compared to net income of $29.5 million or net income per share of $0.75 basic and $0.73 diluted for the second quarter of 2020.

Net loss was $19.4 million for the first 6 months of 2021 or net loss per share of $0.45 basic and diluted as compared to net income of $17.4 million or net income per share of $0.44 basic and $0.43 diluted for the first 6 months of 2020. The decreases in net income for both the 3- and 6-month periods ended June 30, 2021, were primarily due to the company's opting out of its joint development agreement with Janssen Pharmaceutica for the seltorexant program during the second quarter of 2020. As a result of opting out of the agreement, the company immediately recognized $41.2 million in collaborative revenue, which had previously been included on the balance sheet under deferred revenue.

Net loss during the 3- and 6-month period ended June 30, 2021, included noncash interest expense of $1.6 million and $2.9 million, respectively, versus 0 expense for both periods during 2020. The noncash interest is incurred in connection with the liability related to the sale of future royalties to Royalty Pharma in January of this year, which is included on the company's balance sheet.

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

(Operator Instructions)

Our first question comes from Andrew Tsai with Jefferies.

Okay. Great. First question is on just the open-label extension. I mean I've had the impression you've interacted with the FDA from time-to-time over the course of 2021, and you've addressed with some of the things that come up -- that came up during the Type C meeting. So if that's true, I guess, how have those discussions progressed? Have you discussed the open-label extension data with the FDA yet? Or should we expect that to happen later on in the Q4 pre-NDA meeting?

Yes. Remy speaking. Yes. So definitely, no, we have not discussed the open-label extension data with FDA. The interaction we have on a regular basis since beginning of the year are about the topics which have been raised during the Type C meeting. So for the moment, the open-label extension data, as you have seen, have been published, presented, and we definitely will obviously put this part of our package or our briefing book to be submitted to the FDA for the pre-NDA meeting. So -- and I guess it's an important piece of information, if you keep in mind the results we obtained.

Great. And as a follow-up for the bioequivalent study, can you just give us a little bit more clarity around the design of the study? I know 48 patients enrolled. It sounds like you're evaluating 3 different formulations. I guess how many different doses, what exactly do we want to see in the top line data basically?

This is a great question. So basically, first of all, I mean, the protocol has been shared with the FDA. And as I said during the last earnings call, we did not start the study before having the feedback from the FDA, and we got the feedback from the FDA. There is obviously, I mean, we could start the study. So basically, I mean, if you remember during the Type C meeting of the FDA was questioning about differences in terms of formulation between the Phase IIb and Phase III. So the main objective here is to demonstrate that the Phase IIb formulation has the same exposure or equivalent exposure to the Phase III formulation, which has been used.

Just to refresh the mind of everybody, what we did mostly between the formulation of the Phase IIb and the Phase III formulation, there is no major change. The only thing we did was to really improve the tablets by putting some gastro-resistant in order to minimize the food effect because we had a food effect, the positive food effect in the Phase IIb formulation. And that's the reason why you had to give the tablets, a distance from food. So we definitely were successful to minimize the food effect, and by putting this tablet gastro-resistant. So this is what we did. But I mean, again, the main objective is to show bioequivalence in terms of exposure of the compound.

Now we have included a third, how to say, tablet, which is the commercial tablet -- because with our provider -- because we are already working a lot of scale up and to be ready also this level after, obviously, having a positive outcome with the FDA. Here, I mean, some ingredients had to be changed. So nothing has changed in terms of active ingredients. It is only to say, industrializes the tablets. So again, 3 formulations, 48 subjects. Why 48 healthy subjects? Because it's considered as a pivotal study, so you need to power it accordingly. So the reason why you need this number of subjects to be powered 90%, and basically the subject has their own controls. And so the 3 conditions can be compared.

We also have added, obviously, arms with food and without food in order to reconfirm the fact that, I mean, we are controlling for a positive food effect, which we had in Phase IIb, which we do not have with a Phase III tablet formulation. So a quite large study that powered to be considered as a pivotal study. And the final answer about bioequivalence between the tablets and also the answer about the food effect.

Our next question comes from Myles Minter with William Blair.

I just wanted to go back to the mITT analysis of the Phase III trial. I know that was prespecified in the statistical analysis plan. I'm wondering whether you could tell me at what point of the statistical hierarchy that analysis on the primary endpoint in the mITT population actually sat. I'm aware you've disclosed nominal p-values here, and I understand it has to be nominal. But I'm trying to understand the potential degree of multiplicity to apply to that. So I just want to know where it sat in that original samp. If you could provide any color on that, that would be great.

Yes. So Myles, obviously, my (inaudible) a very, very important question, so I'm happy that you answered it to be able to clarify. So basically, it was at the same level as because as I explained already, when we picked up during the blind review -- before opening the blind of the study, we picked up the site with these 17 patients. So 1-7 patients. And when we submitted the final statistical analysis plan, we proposed to the FDA or put in the document, obviously, that I mean, we will analyze the data, the ITT data and the mITT data. And we put them at the same level. But obviously, we can only speak here about a nominal p-value for the moment because it is not the primary endpoint. This was ITT.

But as you have seen from the minutes of the Type C meeting -- and it's always a matter of review. As you know, the FDA is always telling you it is a matter of review because they have to go deeply into the data. They accepted the fact that, I mean, mITT will be confident, and we should submit our file with ITT and with mITT. So this is how the events or the interactions with the FDA went. So again, I mean, it's a matter of review, but I think the mITT is clearly identified. It's clearly recognized by the agency. And from there, we will see what is next. But I mean, I'm very confident because as we discussed, I think, also already before, quite a lot of precedents where, I mean, if you have really a very good rationale, a very good reason why you should exclude some subjects, you can go with the mITT. And so in the space even of CNS, we are definitely in the topic here where mITT is something to be considered.

Okay. Fair enough. And then on the bioequivalence study, obviously, the protocol is being run past the agency and that they are aligned with it. I'm curious as to whether you've had conversations with them about their comfort level with this commercial formulation from Catalent that you will likely not have clinical and safety data outside of the healthy volunteers here prior to submitting for NDA. Like are they happy with the fact that the Phase IIb and the Phase III formulations, you have clinical data around that, but maybe you won't have that for the commercial formulation. There's no chance that make you like try and run an additional study or something, yes?

I think clearly not just because, I mean, we clearly describe what are the differences between the commercial and the Phase III formulation in our protocol. We have, obviously, all the solution data or what you need in terms of CMC to feed to your -- at the end of the CMC package for the NDA. So I think clearly, I mean, there will be no surprise at this level because, I mean, the modifications are really minor. It's purely technical, and it does not change at all the -- I would say, the active ingredients, of the active part of the tablets. But -- and we have been pretty clear in the protocol. So I do not foresee any problems there.

Congrats on the open-label data as well and continue the progress. I'll jump back in the queue.

(Operator Instructions)

Our next question comes from Jason Butler with JMP Securities.

Just wondering, obviously, now you have the allele data. What are your plans to continue to build awareness of the data and the drug over the next year or so as you progress through regulatory submissions? Obviously, presentation of data at medical meetings, but beyond that, any plans to bring on board MSLs or even a nonbranded awareness campaign? Or -- and then secondly, do you have any plans for an expanded access program either here or -- in the U.S. or Europe?

Great question, Jason. So obviously, yes, we will present at medical meetings. And I think there are some presentation at ECNP, the European College of Neuropsychopharmacology. And we will also be present at the American College of Neuropsychopharmacology end of the year. So definitely, yes, we will disseminate this data. And as we speak, I mean, over the last few weeks when we got the data, we have also discussed quite extensively with some of our KOLs involved in advising us, but I mean we went much larger in order to have this data becoming aware to a very large part of the scientific and medical community.

For your, I would say, broader approach, I mean, we might think about a webcast, but we have not decided yet, which will really give it again a complete update about our development and our package because I think it is important. So what I mean this is put into the context. And definitely, we will also give updates, obviously, about the bioequivalent study. We will give updates about the pharmacology because I think the pharmacology of our drug is containing a very hot topics like the sigma target in addition to the other targets. So all this, we will do it. But between today and to have the NDA submitted, I think we will really stay focused on R&D and preparing the best trial and get this done. Afterwards, a new life starts, but here, we will focus on the different topics you mentioned.

Our next question comes from Douglas Tsao with H.C. Wainwright.

Can you hear me?

Yes. Now, we hear you, yes. But go ahead.

Yes. Sorry about that. So just given all the activity that you have going on, but obviously, you have a lot more freedom now with the Royalty Pharma financing. I'm just curious, given the breadth of opportunities, how are you thinking about proceeding with other trials for roluperidone in some of the earlier indications or settings that we've talked about -- I mean, obviously, you're prioritizing the NDA submission. But I'm just curious how you're thinking about that and when we might see some of that other clinical work starts?

Obviously, I mean, we -- this is in parallel. We are really continue to brainstorm. First of all, we continue to get the maximum out of our data. So I'll give you an example. We are currently working on how much is the improvement in negative symptoms is linked to the functional improvements in -- from at level with PSP total score. We are also focusing on the subscores of PSP. We -- if you remember, we have a signal in terms of cognition. We also worked on this. And with -- internally and with our KOLs, we are definitely working on what would be next. Hopefully, cost approval in terms of studies as in the terms of studies, which we could carry out inside the ecosystem of schizophrenia and definitely also transdiagnostic. So I guess the right answer to your question is that we anticipating also in having a good understanding of the clinical side, understanding of what is the right CRO to use if you are running a study.

So this is one activity because as you know, I mean, this is important to have right setup here. But I mean, we are also putting together our plan in order to -- in terms of clinical trials and expanding the indications. And I'm quite sure that, I mean, this is a point we will discuss when we have, in second half of this year, the pre-NDA meeting with the FDA. So we're making sure that we have all the different options open in order to run trials in the best conditions with the best sites with the best organization. And I think slowly but surely, we have very effective and efficient plan in place in terms of clinical trials, which we can also discuss, if needed, with the FDA. So we are ready. But for the moment, first, let us have a very good meeting, a very good final discussion with the FDA before we are starting any clinical trial. But I mean, we are working on it.

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

Yes. Thank you so much, and really thank you for all the great questions and for everybody who participated in this call. Obviously, it's a very important time for Minerva and this open label -- this bioequivalence study results will be very important because it was one of the points raised by the FDA during the Type C meeting. So I'm really looking forward to update you very soon on all this and the rest of the progress we are making because we are also working -- and we did not discuss this today, but we are working on also preclinical package and putting all this into our NDA package. So a lot is going on, and we look forward to update you very soon. Thank you all for participating.

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