Minerva Neurosciences Inc (NERV) 2021 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Minerva Neurosciences First Quarter 2021 Conference Call. (Operator Instructions) Please be advised that today's conference may be recorded. (Operator Instructions) I'd now like to hand the conference over to your host today, Mr. William Boni, Vice President of Investor Relations. Please go ahead.

Good morning, everyone. A press release with the company's first quarter 2021 financial results and business highlights 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; 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 March 31, 2021, filed with the SEC earlier today.

Any forward-looking statements made on this call speak only as of today's date, Wednesday, May 12, 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. Thank you so much. Hello, everybody. I'm really, really very proud and very excited to walk you through this recent results about the open-label extension of our phase 3 study. I think these data are really an important additional piece of information concerning roluperidone and the treatment of negative symptoms in schizophrenia. But before jumping into the data, I really would like to thank once more all the patients, all the families, all the caregivers. And obviously also the clinical sites here in the U.S. and in Europe who have participated through this trial because I know how difficult it is to be in a trial for more than 1 year.

But let me jump into the data, yes. And what you can see on Slide 4 is -- are the objectives of this open-label extension. So the first point, and we discussed this in the past, is to look long-term safety. And this is to tick the box about 1 year administration of the drug. But I think it is also very, very important in order to give us a better understanding of the long-term safety and tolerability of roluperidone. And as you will see, I think this is very important and extremely encouraging and good for roluperidone.

But obviously because, as you know, negative symptoms is the core symptom of the disease of schizophrenia, but it is also the symptoms which are really long-lasting. As you know, negative symptoms are present even before patients have the first episode of positive symptoms, and it is really the chronic part of the disease.

So clearly, it is very important to continue to follow for a longer period of time what is going on in terms of negative symptoms. So what I will walk you through is through the primary endpoint, which is among the negative symptom factor score, which is really a validated tool to measure negative symptoms.

And afterwards obviously it's important to put this in the context of the overall psychopathology of the disease. And that will give you also some key information about what is going on with our drug over this extension of 9 months. And the overall 1 year treatment period in terms of CGI-S, in terms of PANSS total score and other PANSS items.

What is also important, as you know, because keep in mind that, I mean, this study has been carried out in monotherapy. So these patients were only treated obviously with our drug, with roluperidone during the double-blind phase and the [nicer] arm was placebo. But afterwards, during the open-label extension, everybody was in monotherapy or monotherapy of roluperidone for 9 months. So this is obviously important to look to relapse rates because this is always something which is important, which is worrisome. And if the relapse rates are under control, I think this is a very, very important and positive attribute to the drug.

So clearly, I mean, this is also something I would show you. And all these negative symptoms improvement overall psychopathology improvement is really important. If I mean you can demonstrate that, I mean that this is translating into a functional improvement. And I will also walk you through the PSP, which is the personal and social performance total score, which, as you know, is our key secondary endpoint in the study.

And last but not least, because now we have generated a lot of efficacy safety data with the drug, we have the phase 2b study. We have the phase 3 study. I will try to summarize all this and to integrate all this and to -- and obviously we'll give you the next steps afterwards.

Going to the next slide, which is Slide 5, just a small, how to say, reminder about the study design. So as you can see, after the screening period, the patients were entering into the double-blind phase for 12 weeks or 3 months. And we had 3 treatment arms, 32 milligram of our drug, 64 milligram and placebo. And afterwards, I mean, if the patients and the clinical sites were thinking that this makes sense, I mean, the patients were proposed to enter into an extension phase.

What is really important to understand here is that these patients are -- before they're entering the study, they are treated with -- most of them with antipsychotics. They need to be stable over a period of 6 months in terms of positive symptoms. In other words, they should not fluctuate too much in terms of positive symptoms.

And obviously, they need to have a certain level of negative symptoms in order to enter the study. What is also important to understand, and I'm well aware that I mean as the open-label extension is no longer placebo-controlled, but what we have to be aware and I think this gives even more value and more weight to this open-label extension data is that the clinical sites or the PIs are not aware about the dose the patients are receiving in the open-label extension. Neither the patients are aware about the dose they're receiving.

The same is true as well for the patients who were on placebo and are switched to active drug or the patients who stay on active drug. This is definitely completely blinded to the clinical side and to the patients. So again, this is important to keep in mind because it gives, in my opinion, at minimum, more value and more weight to this extension data. So on the bottom of the slide, you have the different parameters. I already went through it. So the need to stay longer on this.

So on Slide 6, I give you the disposition of the open-label extension. So you see that, I mean, we started as a double-blind phase with 513 patients who could enter the -- were part of the safety population. ITT population is the same number of patients. And what you can see when you're going to the fourth row, you see that, I mean, a lot of patients from the different arms went into the extension, which is obviously very, very good. I mean, 333 patients went into the extension.

And as you can see, it's quite homogeneously distributed among the different treatment arms. When you're looking to the different reasons why some of the patients dropped out, I mean one of the main reason is informed consent withdrawal, which is not a surprise because this is a very long study. And for the rest, we will go into the details a little bit later on. But I think a very balanced and very interestingly enough, I mean, a lot of patients and investigators who have decided that, I mean, it is worthwhile to enter into an extension.

So I'm going to the next slide, and this is the primary endpoint. This is Marder negative score. So what you can see here, and it is a little bit explanation obviously about the slide, how the slide is presented. So what you can see at the left side of the slide, I mean, I show you the observed data for the 3 treatment arms of the double-blind phase. In blue, you have a placebo. In green, you have 32 milligram. And in red, you have 64 milligram.

What you can see is obviously that when you are ending this double-blind phase, you can go into the extension. And afterwards, what I'm showing you here on this slide, are all the patients who are receiving 64 in red, all the patients are receiving 32 in green. As you can see at week 52, I mean, the treatment was stopped. And afterwards, I mean, the patients were kept. So you have an additional measurement point after the treatment has been stopped after 52 weeks of treatment.

In the bottom, you have more details, but I mean, I have a summary slide afterwards about all these results. So for the moment, it's not necessary to focus on this aspect. Obviously, as you can see with the green arrow, I mean an improvement of negative symptoms is a curve going down. And so what you can see, I mean, is that clearly, when you continue to treat patients, the patients who stay in the study for 1 year or 9 months extension, the negative symptoms according to the Marder negative score continuously improve and we are reaching levels of improvement which are quite high, and we are at around 7 points of improvement in terms of the Marder negative score.

So does this translate into functional improvement? This is on the next slide. Here we have the PSP total score. Again, the only difference here is obviously we have an improvement in terms of functioning, in terms of everyday life functioning of these patients, which is assessed by the PSP. This is an increase of the curve, yes. I mean -- or -- and the curve -- and the arrow, the green arrow is going up. So higher is better.

So what we can see again here, when you're looking to the double-blind phase, and this is something we already have clearly described when we released the double-blind part of this phase 3. This was also the case in our phase 2B. 64 milligram seems to do a little bit better job in terms of PSP in terms of function improvement as compared to 32 milligram.

But again, when you're looking to the open-label extension over 9 months, you see that I mean this improvement continues and becomes more and more important, which is obviously great news and shows that, I mean, what I mean, roluperidone is doing in terms of improving negative symptoms is translating at the end of the day into a functional improvement, which is what you need to see because at the end of the day, what is important is all these patients functioning better. Keep in mind that this is a key secondary endpoint we had in our study.

Now if I move into next slide, which is Slide 9. I just wanted to give you some additional color on all these and on how roluperidone is doing during the 9-month extension. So on the top left, you have CGI-S, and you can see that indeed in the opinion of the PI or the doctor who is doing the observation, clearly, I mean, he sees the improvement, which is really good news. When you're going down left, so these are positive symptoms and according to Marder. And this is really important information.

So if you remember, we took these patients when they were stable in terms of positive symptoms, the level of positive symptoms were at around 14, 15 points, which is obviously a quite low level of positive symptoms. But keep in mind that, I mean they were on antipsychotics. We switched them to monotherapy of roluperidone. What you can see here, interestingly enough, you still have some room left for improvement. But I think without emphasizing the improvement, I think it is fair to state here that I mean positive symptoms at minimum stayed extremely stable.

Now what is interesting if you're going to the upper part of the slide on the right side, so this is a PANSS total score, yes. So this is a complete improvement you can see on the scale. And you see that again, the total PANSS score is improving for the two doses. And it is improving to a very nice level around 16 points. So what this means is that, I mean if you consider the improvement we have seen on negative symptoms and the improvement on positive symptoms, this improvement on the total PANSS scale is obviously related to these 2 improvements.

But I mean the general psychopathology is also improving if you treat your patients long enough in monotherapy with roluperidone. And last but not least, at the bottom right, I mean, I give you the subscore of the Marder negative score, which is emotional expression. And as you know, from the studies which have been done, this part or this subpart of the Marder negative score, the subpart of negative symptoms at the end of the day is highly explaining the functional improvement or is correlated with a functional improvement.

So I think what I try to bring over here on this slide is that all is -- all the parameters you consider are improving. And in addition, the improvements you see are technically signaling very nicely that I mean on a functional level, the patients are improving.

If we go now to the summary table, which is on Slide 10. So this gives you a complete information about the parameters I have shown you. So on the right side, the 2 columns on the right side, these are the results I've shown you on the slides. And afterwards, you see that you have the details in the middle, the 2 middle columns. These are the patients who received either 32 or 64 milligram for the complete duration of the trial, so 1 year. And on the left side, the 2 columns on the left side, so these are the patients who switched from placebo in the double-blind phase to active treatment in the open-label extension.

So again, I mean, without going into the details, but I mean you have now this in numbers what I presented before. But again, you see that negative scores, PSP functioning, total PANSS score, all these parameters are evolving into the right direction here.

Now coming to the very important point I highlighted at the beginning, which is on the next slide. This is about relapses. So really, I mean, as you know, the definition of relapses is -- we can find differences or different definitions of relapses. But I mean, what we took as a definition is really what you can see at the bottom, is patients who dropped out from the study due to schizophrenia symptoms. So this is a definition we have used.

And what you can see on this slide, I mean, on the top of the slide, I mean, you have the relapse rate as number of patients dropping out for schizophrenia in the double-blind part. And at the bottom, you have the numbers of patients who dropped out during the open-label extension.

So when you look into the overall relapse rate, which is given at the bottom, I mean, we are at around 11.7%, around 12%, which obviously is extremely low. And I am sure that I will get -- we will get a lot of criticism about this and how this is possible. And I will give you at the end my explanation of why this is possible. But I mean, what is very clear is that, I mean, if you treat long enough patients with our drug, in monotherapy, the relapse rate is extremely controlled, and I think this is a take-home message of this slide.

Now on the next slide, I mean, this is a safety aspect that we have observed. So we go through the different points and make some comments because I think they are extremely important to give you a little bit more color on this. But as you can see, I mean, roluperidone at 2 doses, both doses was extremely safe and well-tolerated. And when you look into the treatment-emergent adverse events, they are generally mild to moderate in terms of severity.

When you're looking to the frequently reported treatment-emergent adverse events in these 333 patients, excuse me, in doing the open-label phase, you see that I mean you have 26 patients are reporting headaches. You have obviously schizophrenia worsening 18 patients, so 5.4%, and you have insomnia in 15 patients.

Let me just make here a small comment about insomnia. What we have to keep in mind, even if we are here above one of the most mostly reported event, keep in mind that, I mean, it is very well described in the literature about the incidence of insomnia in schizophrenia, I mean patients suffering from schizophrenia, and the incident is more than 50% in patients suffering from schizophrenia. So again, even if I mean, we have some cases of insomnia, we have to put this in the overall context of the disease, where insomnia is really, really an important parameter or symptom.

When you're looking now to the, how to say, number of patients who had a serious adverse event, we have 26 patients who have had a serious adverse event. And 5, which is really, I mean, a very low number compared to the number of patients exposed to the drug and the duration of treatment. We have 5 where I mean the PI has considered that, I mean, as adverse event was related to the drug.

It is worthwhile to mention that one patient died after he has been discontinued from the treatment and is obviously not related to roluperidone, but I mean related to respiratory failure. But again, this patient already was no longer treated with roluperidone. So when you're looking to the number of patients with treatment-emergent adverse events, I mean, it is around 11% with 25 patients who had relapses. So this is referring to the slide I presented before.

And the rest is a variety of events, which are not superior equal to 1% of the patients. So really, I mean, events which are just occurring in 1 or 2 patients. While the location in terms of QTC, you see that, I mean, we had really a very limited number of QTC increases. So one patient reached the stopping criteria, the 60 milligram dose. Just to be clear, I mean, this patient in terms of absolute value did not go above 500 milliseconds. So it was below 500 milliseconds. But I mean, why he has been stopped is that one of the stopping criteria is if, I mean, the delta increase is more than 60 milliseconds at the 2 measurement points separated by 30 minutes, I mean, you have to stop these patients. So this is why this patient has been stopped in terms of QTC.

So if I'm going to the next slide, how can we summarize all this? I mean, clearly I think what the open-label extension is confirming or giving us as information and again, I think that this is really very important information is that we have a continuous and really sustained improvement of negative symptoms during the complete duration of the study and during the open-label extension. We have also, as I already mentioned, the continuous improvement of daily functioning or the patient are really better and they're functioning better.

There is a clear information coming out from the PSP. This happens in a context where, I mean, psychotic/positive symptoms are stable and where we have really few relapses over 1 year. And this happens in -- with a drug, which is safe and well-tolerated. I did mention obviously in the safety part that I mean, we did not see any weight gain. We did not see any EPS. We did not see any product increase, and we did not see any sedation. I think we had 2 patients where sedation was mentioned. So just to give you a flavor of how this looks like.

How can we interpret this data? And I think there are 2 interpretations here which are possible and which are the most plausible one. And I think the 2 interpretation are not exclusive. They're probably working together. But I mean, the first explanation is about the pharmacology of roluperidone. If you remember, roluperidone is not directly blocking dopaminergic pathways. And particularly, it's not blocking D2 postsynaptic receptor.

So clearly, we have no direct open [anergic] blocking effect. But what we have here is a molecule which has an antagonistic activity on the serotonergic 5 HT-2A receptor. We have a molecule having as well an effect on the sigma-2 receptor, also an antagonistic effect. And we have worked a lot to have even more insight in terms of pharmacology over the last year or so, and it is also clear that in addition to these 2 targets, the molecule has also an alpha-1 antagonistic activity.

So this is really the pharmacological profile. I really would like to emphasize that, I mean, indeed this molecule has a 5 HT-2A activity, which is important. But I mean, it has much more because we have the sigma-2 activity and this alpha-1 activity. And it is very well described more and more because sigma-2 is becoming an extremely hot topic in terms of research and in terms of trying to come up with innovative treatments.

It is very well-known that sigma-2 is probably having an impact on glutamate, and particularly on the NMDA passes. Just to give you, how to say, one of the activities you can see when you are working with specific sigma-2 molecules. So I think really, I mean, the beauty here is that, I mean, we have a molecule which is safe due to the pharmacological profile, but which is also targeting specifically negative symptoms that has an overall effect on the overall psychopathology.

We will, in the future, report more on pharmacology because I think it is important, but I think it is fair to say that probably the pharmacology here is quite adaptive pharmacology to achieve what we have achieved with roluperidone so far. Another explanation which can explain this data is that when you're improving negative symptoms, and this is extremely well-described in the literature, when you're improving negative symptoms, patients are starting to function better. Patients are more adapted to what is going on around them in terms of family life, in terms if they have a job.

So basically they are much more able to cope with everyday life. And at the end of the day, they are showing improvements in their overall psychopathology. And this is maybe another explanation. So probably the 2 things are probably synergistic in terms of what we see with the molecule. There is a last explanation, but I mean, I will not emphasize it because we have only preclinical in vitro data, but I mean this is something we continue to test or to work on.

Remember that, I mean, we were able to show that when we did roluperidone, you can see a very nice increase in BDNF and GDNF. And so you can also raise the hypothesis that maybe we are really helping these patients by doing something in terms of neuroplasticity and overall. So really I think this is the best explanation I see, which is obviously very exciting. And when you integrate this into this magic word totality of evidence, I think the -- this data I just presented over the last 10, 15 minutes, are just giving an additional level of evidence that, I mean, roluperidone is a drug which is probably helping at the end of the day patients to improve in terms of negative symptoms and the overall functioning.

Last but not least, before I give over to Geoff for the financial update. What is next. So what is next? We have just recently started the bioequivalent study, this pivotal bioequivalence study in healthy subjects. And as you know, this is one of the activities we have to carry out in order to take the boxes of the different comments, remarks we received from the FDA at our Type C meeting from last November.

So this is ongoing. And obviously when we will have the data in hand, we will report on this data. We continue all the other activities, which needed to be integrated in our NDA preparation, and we are also putting together all the data, analyzing the data in the right way to go for a pre-NDA meeting as soon as all the different points I'm referencing here are completed.

So I think I stop here, and I give over to Geoff for the financial update. And obviously, I'm looking forward to hopefully all your questions and interesting questions after Geoff has done his update. Geoff, please?

Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter ended March 31, 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 and restricted cash at March 31, 2021, were approximately $80.2 million compared to $25.5 million as of December 31, 2020. In January 2021, the company received a $60 million cash upfront payment from Royalty Pharma in connection with Royalty Pharma's acquisition of the company's royalty interest in seltorexant. We also have the potential to receive up to a further $95 million in additional payments, contingent on the achievement of certain clinical, regulatory and commercialization milestones.

The significant nondilutive funding provided by our agreement with Royalty Pharma, both immediate and potentially over the longer term, will support our top priority, the continued development of roluperidone, our lead asset. Recall that seltorexant is currently in phase 3 clinical development by Janssen Pharmaceutica, a subsidiary of Johnson & Johnson for the adjunctive treatment of major depressive disorder with insomnia symptoms.

We presently 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 from today based on our current operating plan. The assumptions upon which this estimate are based are routinely evaluated and may be subject to change.

Research and development expenses were $3.3 million and $8.1 million for the 3 months ended March 31, 2021 and 2020 respectively, a decrease of approximately $4.8 million. The decrease in R&D expenses was primarily due to lower costs for the phase 3 clinical trial of roluperidone as a result of the completion in May 2020 of the 3-month core study portion of this trial. Noncash stock compensation expense included in R&D expenses was $0.6 million and $0.7 million for the 3 months ended March 31, 2021 and 2020 respectively.

G&A expenses were $4.2 million for both the 3 months ended March 31, 2021 and 2020. G&A expenses included compensation costs, consulting expenses and insurance premiums. Noncash stock compensation expense included in G&A expenses was $0.9 million and $1.5 million for the 3 months ended March 31, 2021 and 2020 respectively. Net loss was $8.8 million for the first quarter of 2021 or a loss per share of $0.21, basic and diluted, compared to a net loss of $12.2 million for the first quarter of 2020 or a loss per share of $0.31 basic and diluted.

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

(Operator Instructions) Our first question comes from Jason Butler with JMP Securities.

Remy, really appreciate you going through all the details there. Just thinking about the -- I guess both the magnitude and progression of improvement. Are there historical data for patients with negative symptoms that kind of speaks to how likely they would be to recover in that manner without treatment intervention, but both again, the magnitude and the progression of the improvement over the full one year?

Hi Jason. Yes, that's a great question and obviously I was expecting this kind of question. But first, I think it's important to mention that, I mean, maybe the study design we have used is not absolutely the same as what you can find in the literature. But nevertheless, I mean, you can find situations where you have a similar study design and why you can get some more color, I mean, by comparing our data to existing data.

So I think what is very clear is that in most of the cases I have seen, and I mean we were -- could found in the literature is that usually, I mean, you have an improvement which is occurring quite fast. And afterwards, the things are really flattening when you are going over several weeks and obviously several months. And so the things are flattening very quickly, yes, I mean, in terms of improvement.

Speaking here about negative symptoms. If you go with patients who had an acute relapse of positive symptoms, as you know, when you bring them down, there are, how to say, having a small improvement of negative symptoms, which is absolute effect. But I mean, afterwards the things are flattening. So basically what it means I think is that, I mean, you have no real specific improvement of negative symptoms. Whereas in our case, I think it's -- it was all the precautions of the study design of the open-label extension.

I think it is fair to say that this continuous improvement over time is something which in my -- best of my knowledge to use the term is unique. Now in terms of level of decrease, again, I think we have to put this in the context of the patient population included in this study. Remember that we wanted to have patients who have a minimum score of 20 points in terms of negative symptoms as they needed to be stable before entering the study. And basically we ended up with patients who have -- who had a score, a baseline of around 25, 26 points in terms of negative symptoms.

So keep in mind that the minimum is 7 points because, I mean, when you're using the PANSS, there is no 0. One is absence of symptoms on each item. But when you're -- what there is a consensus is that, I mean, if you bring back someone to the -- to 20 points and below, these patients are probably starting to function again or functioning better, which by the way is demonstrated with our PSP data. So I think we are really at the level where, I mean, indeed based on what is somehow consensus in terms of where you need to be in terms of negative symptoms to be able to function, we are there.

So this is I think what can be the answer to your question. To compare this to antipsychotics and whatever, I think it's not really what you can do because we are not really dealing with the same pharmacology. We're not dealing exactly with the same drugs here. So -- but I mean, this is what I can answer to your question.

That's helpful, Remy. And then just regarding the next steps with FDA, what would be the trigger for the next FDA interaction? Is it completion of the bioequivalence study? Obviously we'd expect you to submit a package that also includes the -- this new OLE data. But any sense of -- like I said, what the trigger would be for the next meeting and when the next interaction with FDA, formal interaction with FDA could happen?

Yes. So I think that formal interaction is the right term because, I mean, we are interacting with the FDA because we interacted with the FDA when we -- before we started our bioequivalence study because we send them the protocol. We also have already answered some of the questions which came out from the Type C meeting that it is I think extremely clear that one important point or box to tick is about the bioequivalence between the formulation, which has been used in phase 2b and phase 3.

And when this study is completed, indeed, we will really start to finalize all what we need in terms of briefing both documentation in order to go back again to the FDA to discuss next step and then, yes. But yes, so this is the timing or the sequence of events which will happen before we go again in front of the FDA.

Our next question comes from Tom Shrader with BTIG.

Congratulations on the data. And also on the perseverance, it's really remarkable, especially in the face of a second pretty good drug. So my question has to do with your final points you hit on that are I think quite interesting, this idea that the drug gets patients to a good enough state in terms of negative symptoms that then they're able to form routines and sort of get going on life again. And so you have this long-term effect.

Do you need to sort out the role of the clinical trial environment in that? Do you think you need to do a year of placebo-controlled now? And is that hard? And then the follow-up is, do you think the continued improvement in positive symptoms argues that it is a pharmacologic effect? So I'd just like to hear your thoughts on that idea.

Yes. So I honestly, I mean, my opinion, yes. I mean, I think when you're going according to the guidance at the end of 2019, if you are dealing this -- an unmet medical need and if you have really, I mean, the package we have today, I think we have enough data to go to see the agency again. And obviously we are really listening to all the different comments we are receiving. Do we need a study where we are doing a 1-year placebo-controlled and is it possible? I think it is possible to run a study like this.

I think obviously that it will give additional color about how meaningful all this is we have here, but nevertheless, keep in mind that there is some blinding in this data, nevertheless, and historical comparison are really speaking in favor of our data. But if we have to do such kind of study, and I think it is an important study, I think that, I mean, because we are here facing such an unmet medical need, this should be a study which has to be done in phase 4. And there are much more other studies, which could be done in phase 4 to show the full potential of the drug, yes. I mean, not concerning the pharmacology point you're raising obviously, to be very honest, when I started, and this is not a long time ago to work on this molecule, I was convinced that, I mean, the pharmacology is the right pharmacology to keep positive symptoms stable or to improve them, yes, a long time ago when I was very young.

I mean, I was the first one working on [MDL 10907], which is a pure 5 HT-2A antagonist. And you know the history or the story of this molecule. It was stopped because it was not better than haloperidol in terms of controlling positive symptoms, but it is completely clear that a 5 HT-2A antagonist is able to do something on positive symptoms. I'm not saying that I mean a 5 HT-2A antagonist is able to control an acute episode of positive symptoms. But here, we have I think good drugs for acute episodes, which are the antipsychotic system and other vitro blocking molecules. But definitely there is something going on.

There is also interested in a good literature out there showing that, I mean, for younger patients, while the disease is really not already from it, a treatment with a 5 HT-2A alpha-1A molecule is probably better than going to treat them with D2 blocking molecules. So there is I think quite convincing literature out there. So again, I mean, this is an additional layer heading asset. I mean you're improving negative symptoms -- positive symptoms, excuse me. And last but not least, if you're going back to the history of sigma and I mean there were 2 signal items in development a long time ago, and that was involved in one, which was a sigma molecule from Sanofi tested in my research institute when I was running my research institute.

And the hypothesis are that I mean, sigma is modulating the dopaminergic tone, yes. And as you know, schizophrenia is not about only hyper-dopaminergic activity. It's also about hypo-dopaminergic activity, particularly in the prefrontal areas of the brain, which might also be linked to negative symptoms. So yes, I agree with you. I think the pharmacology is definitely contributing here.

And if I can just add a quick follow-up. Was the removal of drugs for positive symptoms for the entire OLE, was that a complexity? Or were these patients that were essentially so sure those drugs weren't working for them that it was not an issue with treaters?

I think it was no longer an issue because we had already the data from the phase 2b. Keep in mind that in the phase 2B, we had a 6 months extension to the 12 weeks of double-blind. So I think going to the (inaudible) committees and so on at the beginning, I mean, I speak at the beginning of the project, I mean it speaking here about the phase 2A, yes, I mean, it was obviously a challenge because that's everybody believed I modestly think that our data are no -- triggering a lot of research about what you should do to really help these patients and to keep them obviously stable in terms of positive symptoms, avoiding relapses and so on.

So a lot is going on. But so I think we already had good data indicating that the risk is not really important there. Keep also in mind that if I mean you ever have worked in psychotic facilities, you -- a patient becomes not, how to say, active in terms of positive symptoms and has not an acute relapse, even if we call this acute in 1 hour, yes, I mean, this is a process which is going on for several days or several weeks before I mean the relapse occurs or the necessity of hospitalization is there. And in bracket, this is the reason why I mentioned also the insomnia part because, I mean, often some of the symptoms are, for example, obviously more agitation, a little bit more aggressivity, but also definitely insomnia.

So again, I think skilled investigators are really aware about this, and they have the tools in order to pick up someone who might relapse basically at the end of the day.

Our next question comes from Jay Olson with Oppenheimer.

Great. Congrats on this new data. Can you just talk about the performance of the patients in the open-label extension who switched from placebo to active and how those patients compared to the patients who were on active all along and what you might have learned from that comparison?

Yes. So this is really a great question. And I think the answer is on Slide 10, yes, I mean, on the summary table. So basically I think the best interpretation I see of this data, obviously the patients who completed the double-blind phase receiving placebo, let me call them placebo responder, yes. I mean -- but what you can see when you're looking to comparing the different groups here, I'm comparing particularly the patients that have been treated for the configuration of the study with active drug versus the one who switched to active drug after the double-blind phase. I think what is added to these patients in terms of improvement is the improvement in terms of the specific aspect of negative symptoms, which is related to functioning, which is this emotional experience. You see that I mean the PSP is really picking up. So basically I think what we are doing here when we are putting our drug onboard, even to patients who have a response to placebo is that, I mean, you are really improving them, specifically in terms of negative symptoms and in terms of functioning.

So this needs a more detailed analysis, but I mean, this is what is popping up when you are really trying to integrate the data here. So -- but clearly, I mean, they are improving. And I -- best of what I can see from the data as of today is that, I mean, they are just having the additional boost here in terms of specific effect in terms of negative symptoms and functioning.

Okay. Great. And then maybe if you could talk about from a big picture perspective, why has it been so difficult to develop drugs to treat the negative symptoms of schizophrenia? And then from a competitive perspective, maybe if you could compare roluperidone to pimavanserin in terms of the mechanism and the data that you have or any other drugs in development for negative symptoms?

Yes. So it's a great question, and I should not be too long, yes, because here it could go on forever, yes. But I think you have to recognize that schizophrenia is basically about negative symptoms, yes. And this is the most enduring symptom or set of symptoms you have in the disease present in adolescence before they have really the full-blown disease and extremely chronic over time. So really to target this aspect needs to have a drug where, I mean, you definitely are targeting the right pathways in the brain.

I think it's clear that -- and this is my dream that post-approval, we will do some studies where we are going to really to a dollar cent or to patients at risk or to first episode patients because, I mean, there in the likelihood to help these patients is even bigger, no? So what I also think is that -- and don't take me wrong, antipsychotics or in other words, dopamine-blocking molecules are important molecules. But these are major tranquilizers, and they were developed as major tranquilizers to treat really the acute part of the diseases. And it is good to see that we -- now we have some treatments even blocking dopamine who are less abating, less impairing and also less impairing in terms of negative symptoms.

So also data showing that when you're lowering the antipsychotics exposure, you see also the patients functioning a little bit better. So I think this is the most difficult part to treat. Keep also in mind that, I mean, negative symptoms is a construct is because you have avolition, you have anhedonia, you have all these kinds of things. I personally think that you need to have an effect on avolition. Why? Because when you think about these patients, they were really good. It's cool. They were interested in a lot of things. And suddenly, they are losing this capacity to be interested in something. And this is the beginning of all the symptoms you might see afterwards in the disease.

I really think that I mean what our data are showing is that, I mean, we are improving avolition. And afterwards, you have this positive loop starting. So again, long story short, I think you need to have a drug which is not impairing. You need to have a drug which is doing the right job in terms of targeting the right pathways in the brain, which are involving negative symptoms. And afterwards I think the patient is -- has insight with the help of a caregiver and the people of the hospitals, psychologists. I mean, they slowly but surely are coming back and are able to cope with the everyday life.

So this is the reason why comparing to competition or whatever the term is, I'm hesitating to do this, yes, I mean, but you heard me already saying that I think the 5 HT-2A activity is an important activity, if you want to really treat the overall psychopathology and particularly positive symptoms. Keep in mind also that the 5 HT-2A molecule is also having an effect on sleep, which can be related to memory consolidation cognition.

But honestly I think it is not completely enough in order to have really a complete recovery and patient who is just functioning at the end of the day, yes. So again, I think this is a reason why. And I think I should stop here compared this comparison to competition because it would not be fair to my colleagues who are trying to come up with other innovative treatments.

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

Just -- I think after we saw the data from the placebo-controlled portion of the study, you sort of indicated that really we're going to sort of focus in on the 64 milligram dose. Just given what we saw from the open-label extension and just sort of really the robustness of what we saw with 32 milligram, and I know it sort of seems very manageable. We did see some QT prolongation. Does that sort of make you think or sort of increase the reason for pushing development for the 32 milligram as well? Just to have that as the therapeutic option?

So Doug, you know we discussed this. And I'm really in favor always of having different doses as an option for the treating clinician, yes. I mean, experience shows that, I mean, this is very helpful. This said, I mean, when you look into the data, I think, yes, I mean it's a fair statement to say that the 2 doses are showing very similar effects. But what it is also -- I think why it is also fair to say is that 64 seems to do a better job in terms of functional improvement, I mean, it's quite clear that, I mean, in terms of PSP 64 is doing a better job. I'm not saying that 32 is not doing anything. No, no, it is definitely improving patients, but 64 seems to be better.

And we do not experience sedation. We have no EPS, nothing like this. So probably, I mean, 64 is probably a better dose in order to really help patients at minimum at the beginning of treatment. So it's a long story short, I think if we could convince the FDA that I mean the 2 doses are helpful, maybe 32 as a maintenance dose and 64 as a dose where, I mean, you can help patients, the initiation of treatment or even when needed during the course of treatment, I think this would be great news. Keep also in mind that, I mean, 32 is a dose we will continue to work on because post-approval, we will have to do the pediatric studies and for the pediatric study, 32 milligrams is one dose we are considering.

So we will accumulate data also with 32 milligrams. But I agree with you, I think the 2 doses are helpful. Even so, I think 64 is a little bit more effective in terms of improving functioning.

And Remy, just as a follow-up on the dosing. In talking to clinicians, and clearly I think you've demonstrated that this drug can have significant utility as monotherapy. In just talking to some clinicians, many sort of talk about this as being used with -- in combination with another antipsychotic. And do you think in that context, perhaps the 32 milligram might be the way to go? Or do you think even there you would prefer the 64? And I have one other quick follow-up after this.

It's a great question. I think what this data will generate is a lot of discussion about do we need in all the patients a chronic treatment of antipsychotics. So this is already a more broader question going largely beyond the Minerva. But I think really that, I mean, we could think about a strategy to treat patients while in 32 milligram would be the maintenance dose, and you have either 64 milligram or an antipsychotic to help going over the hump of an acute episode of agitation, some more predominant positive symptoms. And I mean, this might be the way to move forward. So this is how I see it, yes. So probably, I mean, this opens a space of a lot of different strategies for a larger number of patients suffering from schizophrenia.

Okay. And then just -- I know we're certainly -- and the strength of the data certainly would suggest you have an approvable drug. Just if the agency were to sort of still request an additional phase 3, just given what we saw from the open-label, sort of maybe building on sort of what Tom's question about how you seem to have -- as time goes on, the benefits seem to accrue. I mean, would there be worthwhile reconsidering sort of having a longer double-blind placebo-controlled section?

I mean, I know it sort of -- it reduces some of the comparability. But just clearly, it sounds like -- it looks like the effects continue to build over time. And presumably that would -- a longer study would sort of mitigate some of the waxing and waning of people on the placebo arm as well.

It's a great question, Doug, yes. Just, I mean, if you look into the data, you remember, I mean, we had a p-value at 4 weeks and 8 weeks in placebo compared to 64 in this trial with a double-blind phase, and we had obviously a significant difference in the phase 2b study, even at week 4, keep in mind that in the modified ITT population, we have a nominal p-value with 64. So I think really we have really suffered about the fact that, I mean, we had an extremely positive phase 2b study. And because other drug is not -- cannot pick up -- cannot be picked up, excuse me, to the side effects. I mean we suffered a little bit from a inflation, yes, I mean, always a double-blind phase. This -- all this says, I mean, Doug, I agree with you, I think longer is better in order to get the placebo effect under control. So I'm not saying that we should do a longer study. I'm just saying that it is something to consider. If, I mean, we think about the next trials, what other type of trials with the drug in.

Okay. Great. And congrats on the open-label data.

Thank you, Doug.

Our next question comes from Myles Minter with William Blair.

Congrats on the data. That 11.7% relapse rate seems pretty impressive and definitely above the expectations of clinicians that I've talked to on roluperidone monotherapy here. A brief look at literature would suggest that at least in acute psychosis patients as high as like 40% to 80% relapse over 12 months when you withdraw therapy.

Yes.

I know this is a completely different patient population. So like how do we think about that 11.7% relative to what we would expect in the real world with this particular patient population in the phase 3?

Yes, great question, Myles. So obviously, I mean, when you're in a clinical trial, I mean, there is always something which is not absolutely the same as in real world and when you're in your clinical practice. This said, I mean, we tried really to go according to clinical practices. I mean, so in other words, we switch quite quickly from the antipsychotic to our drug in monotherapy. And all this is very similar to what you're doing in clinical practices. So I think it can be compared to what will happen in real life.

Now your question about this specific study population. I'm not with you here in terms of specialty study population. I mean, I think we just took the patients at a different level than what you're doing usually in acutely relapsed patients. So basically when you're looking to our inclusion-exclusion criteria, they're very similar to what you have in other trials. Yes, indeed, I mean, we don't have the criteria of the total PANSS score.

We have the criteria of checking that I mean these patients have a certain level of negative symptoms. And indeed we are switching them from antipsychotic to our treatment when they are stable in terms of positive symptoms, and it's fair to say that the positive symptom, 14, 15 points is quite low, yes. But so I'm not completely with you that -- I mean, this is a different patient population. And when you're going according to the literature based on our eligibility criteria, and this represents around 60% to 65% of the patients with a diagnostic of schizophrenia. So again, I mean, it needs to be fine-tuned.

I'm not claiming again that in our drug with the data we have currently in hand with the drug, which helps to treat acute episodes of positive symptoms, not at a whole, I'm not saying this, but I'm not completely with you that this is a completely different population than the population we are currently seeing in clinical trials. And this population we have to treat in our clinical practice. So this is my answer to your question.

Yes. No, completely understood. And the relapse rate regardless is definitely impressive. Maybe one on the bioequivalence study as well. I know there was a mention in the press release this morning that you'd be testing an additional commercial and scalable formulation or at least one of them. Is the aim in this trial still to determine non-inferiority between the phase 2B, the phase 3 and these commercial formulations in terms of area under the curve exposure? Are we going to be looking at that B-520 metabolite again that I know was the sort of concern with the QTC wave prolongations over phase 2? Any thoughts there would be helpful.

Yes. No, no. I mean, you completely described it correctly, yes. I mean, definitely the -- remember, we know that, I mean, the efficacy is driven by exposure because we did a lot of PK/PD modeling. And obviously we will do this with the data, including the extension data. So this is a primary objective for sure, and we will continue to control the metabolite and BFB-520 particularly. So you completely described what is the objective of the study.

Okay. And the final one is just for Geoff. You mentioned $95 million in potential milestones from the seltorexant royalty sale to Royalty Pharma. Some of those linked to clinical milestones. There's a lot of phase 3 trials coming on at Janssen for that product. Can you comment whether any of those milestones are weighted to the readout of one of those trials? Does the whole program have to be completed before you would potentially receive a milestone there? Anything you can disclose there would be great.

Yes. So there's a mixture of triggers. Part of it is due to clinical progress, a significant part of is due to regulatory approval in different geographies, and there's some sales bonuses there as well.

Okay. Cool. And congrats on the data. Looks great.

Thank you.

Thanks, Myles.

That concludes today's question-and-answer session. I'd like to turn the call back to Remy for closing remarks.

Yes. Thank you. So thank you all, yes. And hopefully, you enjoyed it. I think we continue to work hard to put together the best package here because I think it is extremely motivating the data we have seen today. And I think it is also extremely important that this drug is moving towards patients who are in need of new treatments for negative symptoms because keep in mind that there is no treatment approved as of today in the U.S. for negative symptoms.

So I'm really looking forward to update you very soon about the bioequivalence study about pharmacology, but all news coming up. Thank you again, and hope to speak with you very soon. Bye. Have a nice day.

This concludes today's conference call. Thank you for participating. You may now disconnect.