Q3 2022 Minerva Neurosciences Inc Earnings Call

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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The conference.

Thank you for standing by and welcome to the Minerva Neurosciences third quarter 2022 conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone as a reminder, today's.

Program is being recorded and now I'd like to introduce your host for today's program Geoff race Executive Vice President.

Chief Financial Officer, and Chief Business Officer. Please go ahead Sir.

Good morning.

A press release with the company's third quarter 2022 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 website at Www Dot FCC Dot Gov.

Joining me on the call today from Minerva are Dr. Remy <unk> executive Chairman and Chief Executive Officer.

Mr. Fred <unk>, 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.

James and prospects that constitute forward looking statements.

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 September 30th.

2022 filed with the SEC earlier today.

Any forward looking statements made on this call speak only as of today's date.

And staying on November nine 2022, 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 low trigger.

Thank you, Jeff and good morning, everyone. Thank you for joining us today.

As we previously reported on August 17, 2022, we submitted our NDA for where the paradigm to treat negative symptoms of schizophrenia to the FDA.

The submission included data from two clinical trials, our face to be in phase III studies in patients diagnosed with schizophrenia with negative symptoms.

We believe that these trials are adequate and well controlled for the proposals of submitting an NDA.

The overall dataset included results from $2 32, milligram and 64 milligram administered in both studies each of 12 week duration double blind placebo controlled.

Also included was a data problems of six months open label extension to the Phase <unk> study.

Data from the nine months open label extension to the Phase III study.

We also provided additional supporting data requested by the FDA.

Putting the receipt of the refusal to file letter from the FDA in October we have requested a type a meeting to discuss the FDA reasons for not accepting our NDA for substantive review.

We expect the type a meeting to occur before the end of this year and the minutes are normally available 30 days after that.

I would like to make a few comments regarding our NDA for rugged paradigm.

First it is important to note that there are no approved drugs in the U S.

To treat the negative symptoms of schizophrenia, which represents a huge unmet medical need.

Furthermore to my knowledge.

No drug is currently being developed or in clinical studies, which has a specific and direct benefit of negative symptoms of schizophrenia.

Towards that other drugs in development bring down negative symptoms is a function of improving positive symptoms and side effects of antipsychotic.

Non has been shown to be effective directly and specifically on disease related negative symptoms.

Furthermore, our two studies have demonstrated that by reducing the severity of negative symptoms road. It paradigm improves the overall functioning of the patient.

Again to my knowledge, while it paradigm.

On the direct which has shown this expecting patient.

Last but not least is well described it as it related scientific literature with Enbridge.

Enbridge psychotic drugs, which block dopaminergic pathways in the brain may cause drug related worsening of negative symptoms over and above those negative symptoms, which are <unk> related.

We believe that there is a large subset of patients diagnosed with schizophrenia, who do not need continuous treatment with anti psychotics for positive symptoms yet.

Suffer negative symptoms that make it difficult to lead some semblance of normal life.

Considering all of these factors from desktop we developed truly paradigm as a mono therapy for this patient sub population.

Having worked in clinical practice and knows that Cigna.

A significant number of these patients in the community hopefully we have recruited and studied in our clinical trials.

We have discussed with the FDA as a need for a treatment towards the specialty accept population of U S patients.

And the FDA has previously acknowledged that negative symptoms represents a significant unmet medical need.

Look forward to discussing the fda's reasons for not accepting our NDA as a type a meeting and we'll provide an update following that meeting.

I'll now turn it over to Fred for the financial update.

Thank you Ronnie.

Earlier. This morning, we issued a press release summarizing our operating results for the third quarter ended September 32022.

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 as of September 32022 were approximately $43 million compared to $60 9 million as of December 31, 2021.

In September 2022, we filed the shelf registration statement on form S. Three to register up to $200 million in new shares of common stock. We also entered into an open market sale agreement with Jefferies LLC.

<unk>, which we may offer and sell shares of our common stock from time to time through Jefferies by any method permitted by law deemed to be an at the market offering.

During the nine months ended September 32022, no shares of our common stock were issued are sold under the agreement.

As of September 32020 to an aggregate of $22 $6 million was eligible for sale under our effective registration statement on form S. Three.

We expect that the company's existing cash and cash equivalents will be sufficient to meet its anticipated capital requirements.

For at least the next 12 months based on our current operating plan.

For the three months ended September 32022, and 2021.

Research and development expense was $2 4 million and $4 $5 million respectively.

A decrease of approximately $2 1 million.

For the three months ended September 32022, and 2021 noncash stock compensation expense included in R&D.

<unk> zero point $5 million in both periods.

For the nine months ended September 32022, and 2021, R&D expense was $11 5 million and $13 $3 million respectively.

A decrease of approximately $1 8 million.

For the nine months ended September 32022, and 2021.

Noncash stock compensation expense included concluded and R&D was $1 5 million and $1 $8 million respectively.

The decrease in R&D expense for both the three and nine month periods ended September 32022 versus the comparable prior year periods.

Was primarily primarily due to lower costs for the phase III clinical trial of <unk> due to the completion of the 40 week open label extension in 2021.

Partially offset by higher consulting fees in support of the NDA submission in August 2022.

For the three months ended September 32022, and 2021 general and administrative expense was $2 8 million and $3 million, respectively. A decrease of approximately zero point $2 million.

For the three months ended September 32022, and 2021.

Noncash stock compensation expense included in G&A was <unk> 5 million and <unk> 6 million respectively.

For the nine months ended September 32022, and 2021, G&A expense was $8 7 million and $10 $7 million respectively a.

The decrease of approximately $2 million.

For the nine months ended September 32022, and 2021.

Noncash stock compensation expense included in G&A was $1 6 million and $2 $2 million respectively.

The decrease in G&A expense for both the three and nine month periods ended September 32022.

Versus the comparable prior year periods was primarily due to lower legal and insurance costs.

For the three months ended September 32022, and 2021 noncash interest expense for the sale of future royalties was $1 9 million and $1 $7 million, respectively, an increase of approximately zero point $2 million.

For the nine months ended September 30 of 2022, and 2021 noncash interest expense for the sale of future royalties was $5 5 million and $4 $6 million, respectively, an increase of approximately <unk> 9 million.

The increase in noncash interest expense for both the three and nine month periods ended September 32022.

First as the prior year periods was primarily due to interest accruing with effect from January 19 2021.

The date at which the company entered into an agreement to sell our royalty interest in <unk> to royalty pharma.

As well as an increase in the underlying balance of the liability, which totaled $71 8 million at September 30 of 2022.

The effective interest rate is based upon estimates, which contain significant assumptions regarding the timing and amount of expected royalty and milestone payments to be recognized over the royalty period.

Net loss was $6 9 million for the third quarter of 2022 or net loss per share of $1 29, basic and diluted as compared to net loss of $9 2 million or net loss per share of $1 72 basic and diluted for the third quarter of 2021.

Net loss was $25 4 million for the nine months ended September 32022.

Our net loss per share of $4 75, basic and diluted as compared to net loss of $28 6 million.

Our net loss per share of $5 36 basic and diluted for the nine months ended September 32021.

Now I would like to turn the call over to the operator for any questions operator.

Ladies and gentlemen, if you have a question at this time. Please press star one one on your telephone.

One moment for our first question.

And our first question comes from the line of Andrew Tsai from Jefferies. Your question. Please.

Hi, Thanks, and good morning, Thanks for sharing the updates and having me.

So despite the Rts that you received which is unfortunate.

Waiting for at this juncture, whether the FDA now does feel comfortable about any of the issues. They previously.

All lines and your prior type C meeting so the formulations the U S versus ex U S M ITT.

Endpoint.

Relative paradigm as a monotherapy and I have a follow up thank you.

Yes.

Obviously, a great great question, yes, so I think yes.

Obviously, each time you have been meeting with him.

We.

Have discussions on your achieved something else so.

We say that zinc.

Because the FDA has proposed to add to his type ABTS something else the wishes of the file.

And so because we have an open dialogue and skin care.

I'd like to comment more on.

What has been achieved and what has not been achieved.

We'll see what happens during this meeting against the FDA has proposed to have this meeting to discuss this.

A few items.

In mind when.

We can report after we had a very.

Very good discussion.

Thanks.

And so.

At this juncture it does not seem as if you would consider a new study maybe after the type.

Theres nothing that changes the FDA stance, then would that be the point, where you consider.

Another study, but if not then I guess.

My question is then.

When would you consider doing another study what dynamics would have to play out first thank you.

I think the answer to your question is that.

We need to have that meeting again with meeting hopefully will help to clarify.

The content.

Awesome.

And hopefully we'll be able to.

<unk>.

Maybe we have two well adequate and control studies that we sell is an upsell to a gallon.

So again I mean, the latest thank you meeting and we've been along and give you more clarity after the meeting.

Sounds good thank you.

Thank you Johan.

A moment for our next question.

And our next question comes from the line of Tom Shrader from <unk>. Your question. Please.

Hey, Good morning. This is Tom on top for Tom. Thanks for taking my question, so kind of as a follow up. So if you guys were required additional data before old paradigm could be a true like that.

<unk> partnership.

But where is that now and then.

Any so any other thoughts on what the trial might look like how similar or different than maybe or yes.

Thank you.

I think so.

First part of the question I will hand over to suggest you're asking me to give you his view.

Concerning the trial again.

We need to discuss.

Topics <unk> gateways teams now.

We have received for the ratio the profile and obviously based on so maybe we will see.

What is <unk>.

Additional data we can provide.

Again keep with us and.

Hopefully we will have.

A good meeting with FDA yet.

Correct.

Jeff can you take the first piece.

Yes, nothing really much to add to that Tom I think.

In terms of what the path forward looks like we'll have.

Our whole clear idea a much clearer idea of following the type a meeting and then.

From a strategy point of view.

We can address that kind of question whether it's.

Necessary to do another study, whether it's best to do that study on our own or whether it's best to do it with a partner I think there was a decision that will we.

We will need to take following the type a meeting.

Great. Thank you for the color.

Thank you once again, if you have a question at this time. Please press star one one on your telephone one moment for our next question and our next question comes from the line of Douglas Tsao from H C. Wainwright Your question. Please.

Hi, good morning, Thanks for taking my questions.

In.

Getting the refuse to file letter from FDA did they cite anything specific or was it from here.

Really just.

Just sort of notifying of the decision and indicating a willingness to have a type a meeting.

Great question.

So normally they handle the rest to give you a reason why yes, I mean in this.

Topics, we will go to discuss this efficacy.

You gave some reasons why you saw and this is what we will be discussing today.

Okay, and so can you give us some.

Would they again was it was it largely focused on the same issues that they had.

<unk>.

Raised in the previous interactions with the agency.

So I think.

<unk> said before I think it's not really wise to go into the details here, yes, I mean that because.

We have an open dialogue and the season is the next.

Step is as these type a meeting.

I really would not like to comment on this as I said before I mean, we are making progress with each time, we speak.

Hoping that you can say.

Type a meeting we will be able to clarify.

The few items Peter opening.

Okay, great. Thank you.

Welcome back.

For our next question.

And our next question comes from the line of Myles Minter from William Blair. Your question. Please.

Hi, just a clarification question did the SDI truly parse this plot by meeting as a recommendation because my understanding is that that is a non op thing to put in our letter or digest sort of half commentary and that sign this as a potential path forward.

It is for all US yes, that's the first question.

Yes.

Is it proposes a type a meeting.

Okay.

And then something that is in your control I believe when you requested the top I mean, you have to submit a list of questions that you'd like addressed in that meeting can you give us at least a flavour of what does the list of questions where it because they came from and Thats not interpreting how the FDA is going to respond to them. Thank you.

No not really.

Just a question we have is that helps.

Obviously extremely limited and is completely focused on that.

In the letter from the FDA, so its not new questions or whatever.

It's really focusing on a.

A few points as erasing the lessor.

Just as a principle.

Taipei.

Awesome.

Okay. Thanks for the questions.

Welcome.

Thank you.

One moment for our next question.

And our next question is a follow up from the line of Andrew Tsai from Jefferies. Your question. Please.

Thanks, just one more follow up I appreciate you taking the questions.

Are you working on.

Other assets in the pipeline.

Are there next steps that we can look forward to perhaps next year just wanted to kind of gauge your thoughts on quote unquote contingencies are continuously planning. Thank you.

So great.

Great question as well so clearly obviously the focus is on that.

On the other paradigm that's because this is where it is now.

The most important asset because it's a very late stage asset and it is about the dry markets, but it is true that we have.

And early stage pipeline and the.

The CVR.

Moving to pipeline as fast as we would like to have this pipeline moving that.

We are moving so so yes, indeed, I mean, if I mean, where things are going well with that.

These are only paradigm.

Which I think will go very well.

The rest of the pipeline, we moved to the SMB. We can report program featuring next.

Next year.

On this early stage program.

Okay, Yes.

Perfect.

Fingers crossed on the Taipei. Good luck. Thanks. Thank you so much.

Thank you so much.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Remy Lutheran gear for any further remarks.

Yes. Thank you so much already.

Ladies and gentlemen.

This concludes.

Our earnings call.

I'm really looking forward to give you an update.

Type a meetings.

You had mentioned I think in our press release.

Meeting.

We take place before the end of the year and we have requested a meeting.

Thanks, Alright, and normally we get minutes 30 days later and obviously as soon as we have.

Alrighty.

Give you all the inside the achieved and.

The.

Hard to say.

Which we achieved basically again theres a David do you have data in order to move forward.

Paradigm, which as you know is.

An extremely important drug recently approved drugs.

Thank you again for the time and looking forward to give you a next step.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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