Q3 2020 Minerva Neurosciences Inc Earnings Call
Ladies and gentlemen, today's call is scheduled to begin shortly please continue to stand I think you for your patience.
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Welcome to the Minerva Neurosciences third quarter 2020 conference call.
At this time, all participants are in listen only mode.
There will be a question answer session following todays prepared remarks.
Call is being webcast live on the investors section of the nervous website at <unk> or not the nerve in Neurosciences dot com.
A reminder, today's call is now recorded.
I will now 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 Companys third quarter 2020 financial results and business highlights became available at 730 <unk> Eastern time today. It can be found on the investors section of our web site.
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 Fccs website at Www Dot FCC Dot Gov.
Joining me on the call today for 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.
Following our prepared remarks, we will open the call for acuity.
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 FCC.
Including our quarterly report on form 10-Q.
Quarter ended September Thirtyth 2020.
Files with the FCC on November 2nd 2020.
Any forward looking statements made on this call speak only as of today's date Monday November 2nd 2020, 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'd.
I would now like to turn the call over to Remy Luthringer.
Thank you Bill and good morning, everyone. Thanks for joining us I hope everyone is doing well.
As we approach our meeting with the Afghan November 10, you remain untouched, yes take a bunch of potential off I believe that all the paradigm and believe it will have a significant impact comes alive, so patients with schizophrenia.
Our confidence is based on our experience as a clinical database compiled to date, we've just come on.
I want to make it to bring body paradigm to patients as quickly as possible. However is currently no approved treatments for negative symptoms, which remains a leading unmet need for patients. We should teach so families ends at treating physicians.
And on the topline results once or twice a week double blind problem solver phase three study in Maine.
So as the study did not achieve its primary objective results turning to use 64 milligram dose demonstrated Gi early onset beneficial effects on negative symptoms that translated into a functional improvements.
Well the Paragon was also generally well tolerated in this trial with a safety profile comparable to placebo.
Following that announcement, we have completed extensive analysis of data from this trial and others, including an integrated analysis of data from our phase to be phase three trials that shows a highly significant separation between the two of those it will depend on and placebo.
In addition, we know we have a large amount of data from the 40 week open label Phase Oneb, just train which is on schedule to complete in the first quarter of 2021.
In late September we provided these findings to the FDA in preparation for was a type C meeting scheduled for his attention from November.
During the first public meeting our findings will be discussed with the FDA and we expect to receive the agency's feedback about the next steps in the development and potential regulatory approval of front of terrorism.
Let me provide a further update on public meeting ones with minutes have been finalized by the FDA, which is expected in December.
In summary, the recent phase three data combined with or close a data accumulated over the last few years continue to support other believe sets limits have done can become an important treatment for schizophrenia patients.
I will now turn it over to Jeff who was a financial update.
Thank you Remy.
Earlier. This morning, we issued a press release summarizing our operating results for the third quarter ended September Thirtyth Twentytwenty.
A more detailed discussion of our results may be found in our quarterly reports on form 10-Q filed with the FCC earlier today.
Cash cash equivalents and restricted cash as of September Thirtyth Twentytwenty were approximately $32.6 million.
During the nine months ended September 30th we raised $12.1 billion net of fees from the public offering of stock and therefore, we presently expect of the company's existing cash and cash equivalents will be sufficient to meet its anticipated capital requirements into early 2020 two.
Based on our current operating plan.
The assumptions upon which this estimate is based on routinely evaluated and maybe subject to change.
R&D expenses for the three and nine months ended September 30th.
20, $24.6 million and $18.5 million, respectively, compared to $9.7 million and $29.6 million for the same period in 2019.
The decreases in R&D expenses in Twentytwenty, primarily reflect lower development expenses for the phase three clinical trial of Rowley paradigm and the completion of the phase two be clinical trial of Min one long seven in December 2019.
We expect R&D expenses to decrease during 2020 compared to 29 team as we have completed the mid 117 clinical trial and the 12 week double blind portion of the phase three clinical trial of roll the paradigm.
DNA expenses for the three and nine months ended September thirtyth $20 million to $23.5 million and $13.5 million, respectively, compared to $4.6 million and $13.9 million for the same periods in 2019.
The decrease in GNS expenses in the three month period was primarily due to a decrease in non cash stock based compensation expenses and lower commercial expenses.
And the decrease in DNA expenses in the nine month period was primarily due to lower commercial expenses.
Net loss for the three months ended September 30th Twentytwenty was $8.1 million or a loss per share of 19 cents basic and diluted compared to a net loss of $14 million or a loss per share of 36 cents.
Basic and diluted for the three months ended September Thirtyth 2019.
For the nine months ended September Thirtyth 2020.
Net income was $9.3 million or 23 cents basic and diluted compared to a net loss of $42.3 million for a net loss per share of one dollar an eight cents basic and diluted for the nine months ended September Thirtyth 2019.
Collaborative revenue was $41.2 million for the nine months ended September 30th Twentytwenty compared to zero for the same period in 2019, an increase of $41.2 million then.
The increase in collaborative revenue was the result of the Companys opting out of its co development and license agreement with young son self directed.
That revenue was recognized during the second quarter of Twentytwenty as there are no future performance obligations under the agreement.
Now I'd like to turn the call over to the operator for any questions operator.
Ladies and gentlemen to ask the question do we need to press star one and your telephone to withdraw your question press the pound key piece to bone compiled the Q many roster.
Our first question comes from Jason Butler with JMP Securities. Your line is now open.
Hi, its Roy in for Jason Thanks for taking the question I guess on.
Probably can't say anything about this but since you've submitted the material for the type C meeting. The agency have you had any feedback from the agency.
I'm on the material anything else and then it looks like you sold about $7 million with the shares for the ATM in the quarter. How do you guys use the ATM in the current quarter and how much is remaining under that facility. Thanks.
So thank you for the question. So Remy speaking I will take the first part and the second part I want to keep the door to congestion so.
As you know when you when you're submitting your briefing book to the FDA do you have.
They think stuff wasn't meeting you get the feedback from the FDA.
A few days before the meeting happened. So I'll just today, we did not get any feedback from the FDA suggests recognized to receive tough a briefing book, but I think they're sold some to commence a different question sorry, Austin, we come out later.
Later this week or early next week.
Jeff can you take the other one sells apart.
Yeah of course, thanks for the question, we so around $5 million worth of stock in the second quarter, we sold $7 million in the third quarter, we haven't sold any stock in the fourth quarter.
We had an ATM facility 60 million in place, we sold 12 that'd be 30.
38 million remaining under the ATM.
Got it thank you.
Thank you. Our next question comes from Tom Shrader with BTG. Your line is open.
Hi, This is Julian on for Tom. Thank you for taking my question on keeping in mind. Its a lot is still to be determined from your meeting with you again next week I was hoping if you could talk about what preparations you've been making ahead of that meeting for the range of possible outcomes here and how fast you can move forward from there whether it be additional analysis falling in India or an additional trial.
Thanks.
Yeah.
The important question Hassan and obviously is a success as you know obviously patient S. M and now as you can guess we are obviously paintings a different outcomes also we zones of data we have generated that'd be put into the briefing book, we are extremely confident that the FDA will understands that.
We have a read that Recompeting day pass or are you already have seen when you combine the two studies phase to be in phase three.
Two doses are showing an effect comes a primary endpoint, which is sometimes negative score. According tomorrow, there will be a sheltered improvement he knows that I.
Well you should use a driver off Oh, Gee Shakespeare seeding she's a RIDEA a key driver.
But do you need obviously, we are anticipating any outcome and we are also working currently on what would be the next steps if I'm in the FDA is requesting us to do and I was just talking to gain we don't expect this at all we don't doing all that pretends that this will not happen and we have already on so I'm just sick pay to.
Obviously, yeah.
Yeah, not easy so the extension.
A phase of genes that extension pockets the study, which will end in the first quarter of next year and so all this is ongoing ordering pizza in preparation and when do we get to the feedbacks to find the feedback from the FDA doing is of course in December we will be able to react extremely fast us up because I see we have a obviously pay to go.
It's different types of scenarios.
Okay got it. Thank you that's helpful.
Thank you.
Thank you. Our next question comes from Joel Beatty with Citi. Your line is open.
Yeah, Hi, Thanks for taking my questions. If a another phase three trial needs to be done in could you discuss the potential trial design, there and you know any any differences that could help enhance the probability of success.
Yeah. So so far so obviously I mean, there's a final study design will be will be based on the feedback at all or is it discretional interaction with <unk>, we have yeah, yes, but which Kelly I mean is there are some parts, which will complete the keyless entry will not run them. So for example, we will not have an extension to just have the Esa.
You know, it's a nine months extension this year because.
As you know this is really to the extension and he's here to to pizza box off a 100 patients exposed to a structural one year and.
As of today, we have already a lot of patients who have completed the extension. So so definitely we are taking just books no concerning the study.
In terms of primary endpoint or I guess, if we come out from minus upon scale as we do each one is a face to be into phase three.
It will be discussed which kind of of endpoint, but I I think that I mean, we will still discuss about.
ER negative symptom score coming all trends upon slides a modest negative score.
Maybe can be fine, Sean, but what I can see something.
I'll, just say improvements or some.
Well my modifications if I can put just rockets in the secondary endpoints as you know we already have a very good team that I mean on a functional level with PSP totals calls I mean, just based on improving oh on the functional level jobs functioning better. So maybe we can find shouldn't this aspect because uh huh.
Stuff my knowledge.
No the rock has ever improved negative symptoms and as a consequence as an improvement in terms of.
Functioning in a so so I think this is a.
Where where I means that discussion bite and if we have to do an additional study.
Okay, Great that's helpful. Thanks.
Thank you drew.
Thank you. Our next question comes from Douglas Tsao with H.C. Wainwright. Your line is open.
Hi, good morning, Thanks for taking the questions just yeah.
Yeah, Remy a lot of it sort of Youtube subjective already been touched upon but I'm just curious with the ongoing open label extension are there any obviously safety is key.
Sort of purpose of that but I'm just curious are there additional.
Endpoints that are being Medicare, but you think have some that have relevant then and can really sort of in rich.
You know the dataset that.
And as you think about potentially needing to do other studies award is running studies for to support the commercialization and are there things longer term that you would like to look at you know beyond typical that sort of typical sort of 12 to 16 week interval. Thank you.
Hi, Doug this is a very important.
Important question on my.
Oh, the point Youre opening hear us.
So so clearly I mean there are.
Yes, no, yes takings of Bucks off long term safety here on your safety, but Oh.
I think we just because these are ready together, we are measuring efficacy I was wondering if somebody not a and b we continue to measure.
Ponds, we continue to measure PSP, so be it we will have a data.
So I think a significant number of patients or at the end of the day for efficacy and so this is the first thing and I think.
It would be important hopefully to demonstrate exactly what you have demonstrated he didn't to face to be which genes that after or beyond is a double blind phase of 12 weeks I mean patients continue to improve for negative symptoms and functioning and so this is obviously very important and I think it was an important uh huh.
Actually we could discuss and the face to meeting, which we said was you have gained.
Hopefully we will also be able to discuss this.
At this meeting these upcoming meeting because we.
We have obviously following this very carefully and we are analyzing the data on a regular basis. He was the seats are ongoing but I think there is beyond does a measured someone's the scales, but using that she didn't I was auspex disease, which is important in addition to safety aspect is a you know how many patients.
Stage, the Saudis and how many patients dropping out from society and for which reason.
And ER one important aspect is to know how many patients are dropping out for relapse is a positive same TBSA because keep.
Keep in mind, here's what I mean, we we have we have a monotherapy we have not to add to what antipsychotics on board and if we can demonstrate that over a period of one year or as these patients are stable or even improving slightly positive symptoms.
Without the relapses I think this is an important aspect as well so lots of data coming out from this extension a lot of data or [noise].
Oh, probably off the interest that will be discussed we see we see FDIC and and.
What I can say is that I mean, we are monitoring just continuously into and I think.
We are pointing towards the right direction.
Okay, Okay, great and Remy can you remind us when we would expect to see data.
You know the investment community from that fund the open label extension that are paying attention.
So we will have the last patient last visit that during the first quarter off for next year or so so really I mean, Oh, I don't see anything which would which would delays. This so you should see something as soon as we have the chance to analyze this data so probably towards the end of the first quarter begin.
The second quarter.
Great. Thank you so much.
Yeah Welcome Doug.
Thank you once again, ladies gentlemen, if you wish that's a question at this time. Please press Star then one are you touched on the telephone.
Our next question comes from Mouse mentor with William Blair. Your line is open.
Hi, Thanks for taking my questions just wondering.
Wondering probably to Remy.
Differences between the significant results you saw on the pay us pay in and you know I. Unfortunately to the endpoint, but slightly missed on the modern SFS have you done further analysis to fully understand what the modest scale may be capturing or not be capturing that is.
Isn't reflected in the past kale or bought stress or I'm trying to understand what components cross sorry from what Darren outside.
Sorry that you and also the regulators can get a better sense of what efficacy components are important for this drug.
This is a.
Nice question.
Well I was just so.
I think I think is a good way to to to analyze the data on what you can get out of that data I think is a little bit different than what you have presented on <unk>.
Well you well you hinted to that's why I'm, saying just keep in mind that that means.
The the mob the negative score coming out from the palms you'd know that you have there is a possibility to split.
This core into two dimensions expression and experience and you know that the experience. He is a highly correlated to oh links with functional improvement. That's so this has been.
Read it described very well.
In the literature and you have to remember Abra data I wouldn't be presented top line results. We have a significant effect even at week 12 in terms of Ah Ah experiences. So so so already I mean, if you go with the Sop core.
Core follows a modest negative score you see a function that improvement isn't and I think this is really what is correlated to put it in buckets as I meet with these links.
Two functional improvement and what we have seen the PSP or purchase core so that's not a surprise to us and if you remember interface to beat we had exactly the same I.
I have to say that that may not like interface to be 64 milligram is giving you a stronger a functional improvement and not a surprise a P.S.P. again is showing.
Showing it more significant improvement was the battery effect size, we 64 milligram into phase three or is it just like I can just face to be but again. It seems there is a link here no the wise the total pods.
Okay.
Negative cost sorry from according to market coming out of the punch did not show significance keep in mind that week, four and weak age where we'd be significant compared to placebo and a and b. We really missed for not a lot I mean week week 12, well your RIDEA analyzing what is coming out from my.
Rather negative score you have obviously is a five negative items, which are really common whatever the way youre analyzing negative symptoms and afterwards with GE 16. For example, which is are they just coming out from general checkup apology and ER and the more most of the discussion is that maybe GCE exchanges is easy yes Lou.
King to negative symptoms, but my daughter billing for example to positive symptoms. So I think.
You know what that is in addition to expression he's probably less linked to two to negative symptoms.
The subs Carl if expression that so.
So.
Expressed experience excuse me. So so really I mean, I think all but always pointing towards a function improvements based on some analysis again of the pumps, a negative score and functional PSP and I think last but not least sorry to be so long, but oh, we we could demonstrate to gain by going to.
Or even more granularity insides of modest negative.
Core coming out from the ponds and having.
An estimate of abolition teacher remember obligation was a driver interface to be if you ex trucked evolution.
Again from just a modest core you see a gauge the doublevision these greedy.
Eating in a very significant defect resolve drop compared to placebo. So I think the story comes together its logic competitors have face to be.
So I think this is my best explanation.
No. That's that's helpful. And then maybe one for Jeff I guess as you think of.
Best case scenario is coming out of this meeting being precise to filing for US is running another trial for something else. How do you think about the differential near term capital needs for the company and getting that over the line.
And also can you is there any close to opt back in to the Seltzer Rixson program. When you opted out or is that completely off the table now that janssens proceeded into phase three trials. Thanks.
Thanks, Myles I'll take your second question, but so there is no up back in warehouse and and that's.
That's the sort of final position of course as you know we have a permit.
Single digit royalty on worldwide sales of self direction, but Johnson.
Well be making at some point in the future once the phase three is complete.
I'm coming back to your first question.
Finally, our first priority is to continue with the extension to the study and obviously then there's a number of steps that we have to go through.
In order to file the N.D.A., obviously, depending on what we get back from the FDA, we will need to raise capital at some point in the future I think it's too early to speculate on what the size.
Side, the capital raise will be but obviously after we discuss that with the FDA and have the minutes fine like will discuss that with with investors and analysts. So once that number is finalized.
Cool. Thanks, Thanks for answering the questions and good luck everyone on on November 10 should should be interesting. Thanks Yep.
Huh.
Thank you. Our next question comes from Byron and then with Jefferies. Your line is open.
Yeah, Hey, good morning, guys. This is gene Mukherjee on for barren maybe two quick questions from me first you know if another confirmatory studies required how quickly could you get that up and running and the second question is perhaps maybe for Rami you know your data I think showed that on the pans classic southern.
An item negative score the 64 Mig dose was statistically significant so is there any analysis on your part on which items from the Mart or scale didn't perform so well and do you perhaps plan to use the classic scale as maybe a primary or perhaps co primary endpoint for any subsequent phase three that might.
The required thanks.
Yeah. So the first the first part that you already.
I'll address this one I think one of the previous question. So we are completely ready or something to to push a button if if need to decimate for an additional study so we have anticipated.
He's abilities, we have participated.
A study design that we have participated.
The infrastructure in terms of Seattle and Uh Huh.
Well, we've been worked we should see a rule you know just to run. The study. So this is a really ready to go after whether you have always it's a regulatory approval in the different countries I don't just kind of things, but a definite.
Definitely as soon as we have said minutes as soon as we know.
Once we have to do if we have to do it I mean, we are we already.
Coming to your second part I mean, it's it's a it's will again a little bit linked to what I tried to explain a based on the previous question. Yes, obviously, we have analyzed the item by item question by question we have analyzed.
All of our of our results coming out from his upon sesa, particularly forms of pumps and negative score. According to monitor that they say that maybe it's very clear that I mean, if you're going with that.
It was a Z items lots of questions, which are mostly related to abolition ER. We knows that the drug is extremely active compared to placebo and so this is just the.
If needed a confirmation of what we have seen in the face to be as I also mentioned that means you can split.
As the PANSS negative score according to monitoring too are experiencing.
Experience and expression to cheer again, I mean, we can really see that I mean, that's the question slush items, which are related to functional improvement or more people to keep a related to function improvement are again a.
Very significant that was good effect sizes compared to placebo. So yes. They are a few items which are left.
Which are not showing as a horse two questions, which are left which I'm not showing the same statistical significance, but.
Again, I think all of it is related to what is connecting as a measurement. He has a pounds of functional improvement.
He is really showing a significant improvement and maybe more generally comment on those east.
When you're going really to the literature SNS <unk> two is our current consensus of scientific a k., while medical community I think everybody stops just not in agreement that I mean obligations. We had an extremely important key driver of what happens in schizophrenia. You know these are patients a dollar.
Good that's cool and suddenly.
They're losing the ability to really get engaged to be interested in eaten a EPS.
In this union activity, which is basically abolition and and it is very well demonstrated that obviously afterwards, I mean, just patients presenting with other symptoms like I need to one yeah.
No no just whatever you want but I mean this is really a consequence of the abolition. So so I think this.
This would be an interesting discussion we see we see FDA because I know, it's a G.F.D.A. I mean I'm speaking here bunch of psychiatric division is interested in Saps course.
To have drugs, which are more specifically addressing.
Some parts of Oh for constructs because negative symptoms as a construct basically it's not a simple is a constructive symptoms and I'm pretty confident that we will have a very exciting and a constructive discussions as you update your rough.
Great. Thank you so much.
Thank you and I'm currently showing no further questions at this time I turn the call back over to Remy Luthringer for any closing remarks.
Yes, I think there's a much EPS. So thank you all for listening for all your questions I think on very important questions and.
As you can guess I mean, we are really.
The complete companies really focused on this.
Meeting, we've had lots of Tencents November and as soon as we have Uh huh.
Agreed on the on the final minutes from the FDA, we will obviously share or just because you are as soon as we have lots of data together. So thank you again and take care.
Ladies and gentlemen. This concludes today's presentation. Thank you once again for your participation you may now disconnect have a great day.
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