Q3 2021 Minerva Neurosciences Inc Earnings Call
Welcome to the Minerva Neurosciences third quarter 2021 call at this time all participants are in a listen only mode there'll be a question answer session. Following today's prepared remarks. This call is being webcast live on the investors section of <unk> website at IR Scott.
Minerva Neurosciences dot com.
As a reminder, today's call is being recorded I would now like to turn the call over to Jeff <unk> President of Minerva. Please proceed.
Yeah.
Good morning.
A press release with the company's third quarter 2021 financial results and business highlights became available at 730, 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 Dot SEC Gov.
Joining me on the call today from Minerva are Dr. Remy <unk> executive Chairman and Chief Executive Officer.
The thread our home Chief Financial 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 $19 95.
We caution that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated.
Those 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.
<unk> with the SEC, including our quarterly report on Form 10-Q for the quarter ended September 32.
2021 filed with the SEC earlier today.
Any forward looking statements made on this call speak only as of today's date Monday November eight 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 Randy nutrient.
Thank you Jason good morning, everyone. Thanks for joining us today.
I would like to focus this morning's update on our lead program royalty Paragon.
On September searches 2021, we announced the results from our pivotal bioequivalence study, whereas the results met key pharmacokinetic objectives and demonstrated arguably three columns.
Various formulations.
The objective of the study was to compare formulations employed interface to be in phase III trials as well as the planned commercial formulation designed in conjunction with <unk>.
Our commercial supplier facilitate large scale manufacturing.
This type of study the area under the curve.
Two last detectable concentration AUC loss.
So Ali does occur extrapolate it to Infinity AUC infinity.
The maximum plasma concentration C Max.
Most commonly used plasma pharmacokinetic pardon me just to evaluate bagging equivalents between various formulations.
Hello to everyone.
Earlier work has shown efficacy in patients with negative symptoms of schizophrenia is mostly driven by plasma exposure of the drug I E AUC, well safety margins improved by reducing C. Max of the drug.
Furthermore, I was wondering Paragon is intended for <unk> and <unk>.
Populations are controlled release AUC Infinity is the most relevant of AUC measurements.
When single dose data are collected and used for data mining by equivalents.
In this study the two most important objectives to establish firstly, so comparability on the fasted conditions of the 64 milligram tablets.
Phase III formulation of Florida paradigm, compared with 64 milligram dose based on the administration of $2 32 milligram tablets slowly paradigm used.
In the phase <unk> study and secondly, the comparability in the fasted conditions.
64 meeting grant tablet the planned commercial formulation of probably paradigm compared with 64 milligram dose based on the administration to certainly two milligram tablets offered to parallel used in the phase <unk> study.
The data showed that both objectives are met.
Infinity, where volume equivalent.
<unk> of the reformulated phase III and planned commercial formulations had been reduced substantially compared to the face to be formulation.
In this study we also demonstrated bioequivalence in terms of <unk> and <unk> between the 64 milligram formulation of the planned commercial tablets and the plastic conditions compared to the formulation used in phase III and buy.
Bioequivalence, both in terms of AUC Infinity and C. Max of the 64 milligram dose of the planned commercial formulation in the fed and fasted conditions.
In summary, I believe that bioequivalence study of Brazil.
Presents important progress along mineral robust critical path towards submission of an NDA for <unk> paradigm.
Moving on to our recent correspondence with the FDA.
Last week, we announced that the FDA had denied a company's request for a pre NDA meeting for wounded paradigm and proposed at the type C guidance meeting would be more appropriate.
Therefore, the company plans to request the type C meeting.
So to conclude my update this morning.
The successful completion of the Bioequivalence study represents an important component of the NDA package.
Subject to the timing of and feedback from the FDA. We continue to work towards the submission of a new drug application in the first half of 2022.
Finally, I would like to take this opportunity to welcome book to run monarch, which your backlog is our new head of R&D at Minerva.
I will now turn it over to Fred for the financial update.
Thank you Remy.
Earlier. This morning, we issued a press release summarizing our operating results for the third quarter ended September 32021.
A more detailed discussion of our results can be found in our quarterly quarterly report on Form 10-Q filed with the SEC earlier today.
Cash cash equivalents restricted cash and marketable securities as of September 32021 were approximately $65 7 million.
Compared to $25 5 million as.
As of December 31, 2020.
Our cash position was strengthened significantly significantly in January 2021.
With the receipt of a $60 million upfront cash payment from royalty pharma.
In connection with royalty pharma acquisition of the company's royalty interest and sell direct them.
Under this agreement Minerva has the potential to receive up to a further $95 million in additional payments.
Tangent upon achievement of certain clinical regulatory and commercialization milestone.
As a result of the sale of <unk> interest in the sell through or exit royalty stream to royalty pharma.
Whenever we will recognize noncash interest expense related to the amortization of this future revenue stream.
Compared to the cash payments ultimately receive from the anthem.
Accordingly.
For the three and nine months ended September 32021, Minerva recognized $1 $7 million and $4 $6 million respectively.
The noncash interest expense related to this agreement.
$60 million payment received from royalty pharma has been included on our balance sheet under a liability related to the sale of future royalties.
As we recognized interest expense.
<unk> related to the sale of future royalties will increase.
Until such time that we begin to receive the royalties the related royalty payments, which will thereafter.
<unk> liability on our balance sheet.
While the upfront payment and future milestone payments will continue to be included on our balance sheet as a liability.
As I described earlier.
In accordance with the terms of our agreement with royalty pharma in the event that yes, and whats the discontinue that self direction program for any reason.
<unk> has no obligation to repay any amounts received from royalty pharma.
We expect 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 three months ended September 32021, and 2020 research and development expense was $4 5 million and $4 $6 million, respectively. A decrease of approximately <unk> 1 million.
For the three months ended September 32021, and 2020 noncash stock compensation expense included within R&D was <unk> 5 million and <unk> 8 million respectively.
For the nine months ended September 32021, and 2020.
R&D expense was $13 3 million and $18 $5 million, respectively, a decrease of approximately $5 2 million.
For the nine months ended September 32021, and 2020 noncash stock compensation expense included within R&D was $1 8 million and $2 2 million respectively.
The decrease in R&D expense for both the three and nine month periods ended September 32021.
Just as the same periods in 2020 was.
It was primarily due to lower costs for the phase III clinical trial rolled the paradigm.
For which the three months core study portion of the trial was completed in May 2020.
For the three months ended September 32021, and 2020.
General and administrative expense was $3 million and $3 5 million respectively.
Decrease of approximately <unk> 5 million.
For the three months ended September 32021, and 2020 noncash stock compensation expense included within G&A was <unk> $6 million and $1 2 million respectively.
For the nine months ended September 32021, and 2020, G&A expense was $10 $7 million and $13 $5 million, respectively. A decrease of approximately $2 8 million.
For the nine months ended September 32021, and September 32020, noncash stock compensation expense included within G&A was $2 2 million and $5 6 million respectively.
The decrease in G&A expense for both the three and nine months periods ended September 32021 was primarily due to noncash stock compensation charges.
<unk> from certain stock option awards approved in June 2020.
As well as some additional stock compensation expense incurred under our severance agreement during 2020.
Net loss was $9 2 million for the third quarter of 2021 core net loss per share of 22 basic and diluted as compared to a net loss of $8 1 million.
Our net loss per share of <unk> 19 per basic and diluted for the third quarter of 2020.
Net loss was $28 6 million for the nine months ended September 32021.
Our net loss per share of <unk>, 67, basic and diluted as compared to net income of $9 3 million.
Core net income per share of <unk> 23, basic and diluted for the nine months ended September 32020.
The decrease of the net income for both the three and nine month periods ended September 32021 were primarily due to the companys opting out of that joint development agreement with Janssen pharmaceuticals to sell directly during the second quarter of 2020.
As a result of opting out of the agreement the company immediately recognized $41 2 million and <unk>.
Collaborative revenue, which had previously been included on the balance sheet under deferred revenue.
Now I would like to turn the call over to the operator for any questions operator.
Thank you to ask a question you will need to press star one on your telephone to withdraw.
Your question press the pound key.
Our first question comes from Andrew Tsai with Jefferies. Your line open.
Okay. Good morning, and thanks for taking my questions.
First one is just on the timelines of the type C meeting congratulations by the way Im complaining bioequivalence study.
Yes, my understanding is the FDA.
Generally it takes almost 75 days to schedule a type C.
Last year it sounds like you receive minutes within 20 days of your type C meeting and he came back to the Street day afterwards, I believe so basically.
Can we expect that type C meeting outcome to happen say within two to three months.
Alright can you give us more granular timeline you think.
That's my first question.
Yes, Hello, Andrew Remy speaking also thank you for your question.
The nominal timelines for a type C meeting.
Based on low estimates so that some cases.
Of course, those are 75 days.
So those are truly is.
Last year, when we had a recap CB things youre seeing so kick back too much quicker from the agency saw.
Today, we have to stick to this.
Also since some different anything basically Enzo and obviously, we have you need to see an uptick on the so your estimate is probably the acquaintance.
75 day process.
Got it thank you.
Another question is just.
More about the FDA why they think of type seeding would be more appropriate than our pre NDA.
Should we be inferring, maybe the FDA is still very unsure of whether the topics that you guys discussed in the last type C meeting.
Not having fully addressed I guess the root of the question is at what prompted the FDA to do this instead.
Yes.
So obviously I'm not talking about as it plays out.
<unk> asked about.
Especially thinking about monotherapy.
Is it completely your question also.
As you know we have done all the development.
74.
Obvious reasons. This is the first one being the fact book.
If you want to claim for.
Specific effect on negative symptoms on a leash is at minimum.
Many of them in my opinion and it has been recently published by your glucose.
Exports of Kols.
This is probably the only way to do a study in monotherapy versus plus.
Placebo in order to really pick up the specificity checked on.
On negative symptoms. So I think it is already.
Important debate here on a question keep also in mindset.
Common practice.
Mostly focused on positive symptoms indeed.
It did but it made common practices to try to keep someone who does it get more sort of schizophrenia traded.
It is a deep psychotics.
Psychotics, so so when you're putting vishal.
Pieces together I mean, you might have.
A discussion of wrong.
While monotherapy.
We have a really good.
Set of data together, because remember we recently offshore.
Two months ago, no problem is running.
We have disclosed.
Results from the open label extension.
Thanks Nicky.
Can see an improvement of negative symptoms, but this is.
In parallel as you have.
Definitely some.
Some improvement in terms of.
Positive symptoms like medium stability of positive symptoms staying at a very low level after monotherapy with voluntary Beaumont as you'll remember we had an extremely low.
We love strengths or something else, so basically patients who are presenting.
Positive symptoms of psychotic symptoms over the period of one year, where we followed the patients are so so when you're putting all this together again I think.
Yes.
Hum.
Very very good discussion about monotherapy based on number of days I'm really hopeful that we have.
On the right output on the right inputs into the right output at the end of the day from just anything.
Move forward.
Yes. It makes sense. Thank you for all the color and fingers crossed.
Thank you so much.
Thank you. Our next question comes from Tom Shrader with BT AIG. Your line is open.
Good morning.
I add my congratulations for the bridging study Thats a nice result.
Related to the previous question is this the first time the FDA will have heard you present, the open label extension and how much of the data that they see in your request for a pre IND meeting.
Kind of a follow up is do you expect to have to go to this meeting with us.
Within the next trial sort of flushed out or would that be a subsequent discussion.
Thank you.
Great questions.
So clearly the FDA has no kidding.
A lot of IP.
To be very clear nothing about the extension data part of obviously the press release.
We have put out about these results and so you know when youre doing a meeting request.
Going into the details.
Going through some of the questions you might have to put in the briefing book until you might want to discuss during that time.
Pre NDA meeting so so long story short I mean, the short answer is that since they have no.
<unk> insight into this data so so.
If I read into your question I think it is an important piece of information is key.
Really to be able to demonstrate what the FDA wants to trade with.
Concerning.
Additional trial.
And we're very well look I mean.
People seems like we should.
Do a trial or we should have started the trial people, saying that they are made and.
We have been I think when Youre looking to see does the guidance of 2019 November 2019, I think we are taking those boxes.
Because we are dealing with amendment medical need was two well controlled studies.
I think we have.
A lot yet to Sharon to discuss.
Arjun.
We'll see what comes out from this meeting.
Ladies Lindsay, Oklahoma, we will decide that.
If youre thinking one cycle dependent not just on study would need to know which kind of study.
This will not be the topic of the distortion, we we did focus on monotherapy, but.
Afterwards, obviously, we can always.
Discuss about what would be <unk>, but again.
Very clear.
We have what you need in order to have the right discussion on this clarification of monotherapy makes a lot of sense to me and hopefully easy entrance fee <unk>.
She is a data package we have like.
Pockets, which can be submitted thats for one day.
Great. Thank you.
Youre welcome.
Thank you. Our next question comes from Jason Butler with JMP Securities. Your line is open.
Hi, Thanks for taking the questions I appreciate the updates.
Remi just.
Another one on the the type C meeting.
Did FDA.
Does that at all indicated whether it now except the bioequivalence data is bridging the phase II formulation or relates to the formulation to the.
The phase III and commercial formulations or is that still not a discussion you've had and then in the scenario where you have the type C meeting and do decide to continue to submit an NDA would you still think need a pre IMD meeting on top of the or in addition to the type C meeting.
<unk>.
Thanks.
So it isn't so.
So probably shortly.
First a question about the bio equivalents.
I'm sorry, his nose, yet gay has not.
This data is the only things that you have seen is again.
The.
What we have released publicly released and obviously when Youre brings a meeting request.
As I explained just before.
Just going through the different.
Points of topics I would like to discuss.
Going into the details of the results.
Results are slow so clearly it means they have not the complete granularity of these data do you say that do not I mean this was.
Pivotal bioequivalence study, which is basically <unk>.
Something which is going according to some guidance and.
Clearly I mean the.
ACL bio equivalent, but youre not gentlemen.
Okay. So we all buy equivalent forms a key pardon me.
As I explained in my in my talk just before.
So I don't think that there will be any surprise.
Is there more concerning your second question.
I assume this is more focused discussion about mono therapy, and obviously a totality of evidence.
Ease of my discussion on this was definitely a discussion we wanted to have in.
During the pre NDA meeting as well so I think I think depending on the outcome of this meeting we will see but I mean, we are still.
Trying to stick to our guidance again based on the outcome and based on when we get the feedback from the FDA and they would come but we are still sticking to the submission of our NDA in the first half of next year. So this is what the sika can say about this but I'm very hopeful that this will be.
Helping us to execute.
Are you, saying.
At the same time.
Timelines, we have given them.
Okay, Great and then just one more just to clarify so obviously there is there is.
Monotherapy topic, but.
In addition to that are the topics that you that you plan to propose discussing with FDA at the type C meeting essentially overlapping with what you would've.
Would have talked about at the pre <unk> pre NDA meeting.
So part of it as a monotherapy which was part.
Part of it is because obviously we.
We have developed a directed monotherapy for the reasons I was explaining in Florida, Yes, I mean, some of the topics overlapping.
The only difference if you want to find the difference is that that means that we in the pre NDA meeting you always are going through that.
So different modules of your.
NDA like CMC preclinical and so on the SME and not.
Only focusing on the clinical aspects of this.
So this is.
The difference if you want to see a difference.
Jade.
As you know for example, the CMC you could have some specific meetings to check.
Particular boxes as we have done by the way it assumes a posture.
So.
I think we are really ways to do we need to go into boxes.
Before we are going to do a resubmission this but.
So I think this is so.
So the difference.
Less focusing on ticking the box for non clinical aspects.
And focusing more on the clinical aspects.
Okay, great. Thanks for taking my question.
Thank you David.
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.
I'm just curious.
Rodney when you think about sort of your discussion with the agency.
The focus or how important do you think it is.
Because there's been Congress or I guess.
With investors, there's obviously been a conversation about the best use of the volatile known as sort of an adjunct to versus mono therapy. When you think about going to the agency and we had a discussion has it been primarily focused.
Yusuf we focused as a monotherapy and do you think beyond the open label extension data sort of what do you think are your best sort of points of evidence to utilize to support that setup.
Okay.
So this is.
An important question.
That's why there isn't.
Given a very very long long long answer but.
And I think the best answer to your question is to first of all.
I think of the scientific community is really break organizing.
A lot of patients.
As a diagnostic of schizophrenia first of all.
We are not taking good uptake sorry, there is a treatment that seems to have some possibility I'm speaking here about that.
<unk> commercially available treatments.
The Mustangs achievement is the efficacy.
It is a possibility to stop the treatment.
This is one point.
As a need of an alternative treatment.
Second aspect is it.
Quite clear as well does that mean.
Currently existing treatments are definitely not improving negative symptoms.
And meta analysis of them a lot of my time on these is appointed to the hospital.
A worsening of negative symptoms due to the treatment on top of the negative symptoms of the diseases.
It is also true that I mean, a lot of work has been done.
Over the last year.
<unk> two <unk>.
See if we can reduce.
Those are just the exact context center.
Does it have an impact on.
The number of ellipsis towards this is very positive.
So much going on in terms of that.
That's what I understand.
No.
So phenotype.
The patients at different stages of the disease and the sink.
It is very clear, becoming more and more clear is that the significant part of our patients.
Which takes a failure and having really being Basel, just negative symptoms and functioning do not need continuous treatment with anti psychotics. So this is mostly hyper cases, we held.
When we started.
Addition to demonstrate the specific effect.
I think all the data.
<unk>.
I mean, this is possible because keep in mind with the.
We take we took in the two studies, we took patients who were treated or stabilize the positive symptoms.
Psychotic symptoms said these under Psychotics they needed to have a leader amongst Carlos Michel just symptoms and there'll be switched.
Through our trade suggested monotherapy.
When you see that these patients are staying stable on positive symptoms at very low level of the relapse rates as well.
He is extremely low over longer periods of treatment.
We have an additional piece of information we are confirming that some patients can be result on the psychotics continuously embargo. So so all this I think has to be.
And we explained has to be re discussed.
In order to.
Two.
It shows the full power of the data we have generated 2% as opposed to a population who might benefit from monotherapy, obviously, I'm not saying that antipsychotic they are not important to us.
None of the 14th week.
Close.
Obviously.
Planning on saying that I mean, really paydown will treat the next shoot empties out of positive symptoms regurgitation with severe obviously nations delusion. So.
I think we have just.
Trying to fill a gap while it means there is no existing treatment here.
Okay.
And then I guess, just one follow up to that is do you think that you have sort of announced.
Data to support or would you seek.
A specific labeling.
Sort of recommendation for as for rollout hybrid onto the monotherapy or do you think the label would be or do you do you think it would be appropriate for the label to be sort of more agnostic, whether it'd be used as an adjunct for monotherapy.
Hi.
This is not the final answer is there's a reason why there is amazing.
That's what I say, what I think basically as us.
You can give up a drug.
Adam we.
We never have.
Promotive resource more than that's all we have just won the safety aspects of DDI studies, which are needed in order to give.
Our treatment.
<unk> two <unk>.
Cortex.
But again I think to give the best chance to patients to really improve in terms of negative symptoms on the agenda of the day in terms of functioning.
And again, because there was a significant really a significant number of patients who can benefit from monotherapy with our results having antipsychotic embarked all along I think this is what you have to do and what we have demonstrated approach Lindsay.
The FDA will get this so so this is why we are also amortization of about what I'm thinking can be given album.
Probably the best thoughts for me and most of the cases is multiple pump psychotics.
<unk> new CFO.
Okay, great. Thank you.
Yes.
Youre welcome.
I am showing no further questions at this time I would like to turn the call back to management for any closing remarks.
Yes. Thank you everybody for today's call isn't for all the questions on for listening to our earnings call and I'm really looking forward to update you very soon about progress.
We will make over the next coming few weeks and months. Thank you again and have a nice day bye bye.
Ladies and gentlemen. This concludes today's presentation. Thank you once again for your participation you may now disconnect everyone have a great day.
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