Q1 2023 Minerva Neurosciences Inc Earnings Call

Welcome to the Minerva Neurosciences first quarter 2023 conference call. At this time, all participants are in a listen-only mode. There will be a question and answer session following today's prepared remarks. This call is being webcast live on the investors section of Minerva's website at ir.manirvanerosciences.com.

As a reminder, today's call is being recorded. I would now like to turn the call over to Jeff Race, President of Minerva Neurosciences. Please go ahead.

Good morning. A press release with the company's first quarter 2023 financial results and business highlights became available at 730am Eastern Time today and can be found on the investors section of our website.

Our quarterly report on Form 10Q was also filed electronically with the Securities and Exchange Commission this morning and can be found on the SEC's website at www.SEC.gov.

Joining me on the call today from Minerva are Dr Remy Lutringer, Executive Chairman and Chief Executive Officer, and Mr Fred Alholm.

Senior Vice President and 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 1995. We caution that these forward-looking statements are subject to risks and unsanitary actions.

links with the SEC, including our quarterly report on form 10Q for the quarter ended 31st of March 2023, filed with the SEC earlier today.

Any forward-looking statements made on this call speak only as of today's date, Monday 15 May 2023, and the company disclames 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 Lutrinker. Thank you, Jeff, and good morning, everyone. Thank you for joining us today.

It would like to begin with some great news about our really paradigm programs.

We received confirmation on the 27th April from the FDA that our NGA was filed, and on the 8th of May we received confirmation that the review will proceed on a standard review timeline with a scheduled date of February 26, 2024.

This stage, FDA stated that it is not planning to hold an advisory committee.

The FDA also noted that they had identified as potential review issues. Those issues already cited in the FDA's Refuse of the Fight letter and communicated in the Type C meeting in March 2022, which I will discuss in a moment.

Rolle Perredon has another mechanism of action in a new indication and this has not been a straightforward finding process.

So let me provide you with some additional insight in our recent interactions with the agency.

Negative symptoms of schizophrenia are notoriously difficult to treat and as Dr. Harvey commented following the finding of our NDA, an approved treatment for negative symptoms could revolutionize the treatment of schizophrenia.

This is underscored by the lack of any approved drugs in the US to treat these symptoms. And to the best of my knowledge, there are no drugs currently in development that have a specific and direct benefit on negative symptoms of schizophrenia and, very importantly,

that translate into a function of improvement in patients.

While other drugs in development may reduce negative symptoms as a consequence of improving positive symptoms and those related to the side effects of antipsychotics, none have been shown to be effective directly and specifically on disease-related negative symptoms.

Furthermore, our two late-stage studies have shown that improvement in the measures of negative symptoms translates into an improvement of daily functioning.

Again, to the best of my knowledge, Roliparidol is the only drug that has shown both improvement of disease-related negative symptoms and, as a consequence, daily functional ameliorations in patients.

pathways in the brain may cause drug-related worsening of negative symptoms beyond the negative symptoms that are disease-related.

Roliperidone adhesive in monotherapy is intended to treat specifically those negative symptoms that are disease related in a well-identified patient subpopulation which isn't prone to relapse as has been demonstrated in both of our late stage clinical trials.

While we intend for Roliparidone to be prescribed as a monotherapy, one of the issues FDA raised is its potential use by patients on antipsychotics.

When we began Vodiperidone's clinical development, we deliberately choose to position Vodiperidone as a monotherapy.

We chose this approach based on both KOL feedback and my personal experience in clinical practice that highlighted an important underserved population.

A substantial number of patients diagnosed with schizophrenia who do not need continuous antipsychotic drug therapy to manage their positive symptoms, but whose negative symptoms render them incapable of leading normal lives.

As previously mentioned,

These are the patients that we recruited and studied in our clinical trials. We estimate that around 60 to 70% of patients diagnosed with schizophrenia suffer from moderate to severe negative symptoms.

Of those, a significant number do not require antipsychotics to control and stabilize the positive symptoms. Supported by data from our phase 2B and phase 3 studies that included this well-defined group of patients, we submitted our NDA seeking the approval of 64 mg of

We believe that these trials were adequate and well controlled for the purposes of submitting an NDA. The overall dataset included results from two doses, 32 mg and 64 mg.

Each study was placebo controlled and included a 12-week double-blind period comparing monotherapy of the paradigm to placebo.

Also included were the data from the six months open label extension phase of the Phase 2B and data from the nine months open label extension of the Phase 3 study.

The face-to-be study was positive and met the primary endpoint as well as most of the secondary and expatory endpoints for both doses.

on the primary endpoint for 64 milligrams but did not reach statistical significance

The P values are only nominal P values due to the fact that the type 1 error correction used in the trial requires that either both doses must show a P value below 0.05 to declare a positive study, or a single dose must show a P value below 0.025 to declare a positive finding in that those are only.

and this was not achieved. The Sol-Key Secondary Endpoint Measuring Daily Functioning PSP showed nominally statistically significant severity of froliparidone compared to placebo at both doses.

One final point regarding our studies that is worth mentioning, which FDA has raised as a potential issue and which we have discussed extensively with the FDA, is the countries in which our studies were conducted.

We enrolled the Phase IIb study exclusively in Europe , whereas the Phase III study included patients from both the US and Europe .

Kitterfren as a disease does not vary from country to country.

Patients demonstrate the same symptoms and are treated with the same drugs irrespective of where they live.

The US patients and European patients in our phase 3 study had virtually identical baseline symptoms scores and had comparable responses to reliparidin as measured by both the primary and the key secondary endpoints throughout the study.

I would like to personally thank the FDA for the opportunity to have our NDA reviewed, and we look forward to continuing to work with the agency to address their questions.

It's critical for many reasons we have discussed here today that we find an effective and safe treatment for patients with negative symptoms of schizophrenia.

Thank you. I will continue to update all of Minerva's stakeholders of our progress in the coming months.

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

Thank you, Revy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter, ended March 31, 2023.

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 March 31, 2023 were approximately $36.1 million as compared to $36.2 million as of December 31, 2022.

This refund was made in accordance with the federal Food, Drug and Cosmetic Act, which allows for a fee waiver for a small business submitting its first human drug application. 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 are based are routinely evaluated and may be subject to this change.

a decrease of $2.3 million. The decrease in R&D expense was primarily due to lower non-cash stock compensation costs and lower consultant fees related to our NDA, which was submitted in the third quarter of 2022.

For the three months ended March 31st, 2023 and 2022, non-cash stock compensation costs included in R&D expense was $0.2 million and $0.5 million, respectively.

For the three months ended March 31st, 2023 and 2022, general and administrative expense was $2.7 million and $3 million respectively, a decrease of $0.3 million.

For the three months ended March 31st, 2023 and 2022, non-cash stock compensation costs included within G&A expense was $0.2 million and $0.6 million, respectively.

For the three months ended March 31st, 2023 and 2022, we recognized non-cash interest expense of $2 million and $1.8 million, respectively, an increase of $0.2 million.

The increase was primarily due to an increase in the carrying value of the liability related to the sale of future royalties for Salter Exent to Royalty Pharma, for which upfront milestone payments are being amortized under the interest method over the estimated life of the agreement.

Net loss was approximately $7 million for the first quarter of 2023, or net loss per share of $1.31, basic and diluted, as compared to net loss of approximately $9.8 million, or net loss per share of $1.83, basic and diluted, for the first quarter of 2022. Now I would like to turn the call over to the operator for any questions. Operator?

Thank you.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. Please stand by while we compile the Q&A roster.

Our first question comes from Andrew Tsai with Jefferies. Your line is open.

Okay, good morning. Thanks all of you for the update and congratulations on that update. So the first question is, you know, it's clearly an interesting turn of events. So naturally, my question is, what do you think exactly drove the FDA to grant this appeal?

in favor of you guys. Is there something new, someone new at the FDA reviewing your application or did the agency receive some more information from you? What exactly happened? Thanks.

Hello, good morning. Andrew Reni speaking. So I think what happens is that

When we went for this formal dispute resolution request, as you know, you have to provide with an additional briefing book and you have to detail why you think that your NDA is having all the information needed for a review. And I think because we had the chance to have a face-to-face meeting, we were able to get

possible when the FDA starts to really look to the data. So long story short, no new data has been added. It was just a matter of re-explaining what is in the NDA and to have the attention from the person from the FDA.

Very clear. And in the, I think in the pre-pandemic remarks, maybe in your day 74 letter, it sounded like the FDA told you they did not plan to host an adcom. Does this development surprise you in any way?

It's a good question, but what they mentioned is at this stage of the review, yes, so obviously there is this, yeah…

can evolve, yes, but is it surprising us? I don't think so. I think we really have to know to start the dialogue with the FDA or to continue the dialogue because I think the dialogue is not really engaged and and provide all the answers that the FDA might have and hopefully after 10 months of review, I mean, we get we will get the drug approved.

And, again, if, I mean, I think the FDA decides that, I mean, it needs an outcome, they will probably tell us later during the process of review. But no surprise, just we are focused on providing all the necessary information to the FDA during the course of review. Great. And then very last one is maybe for Fred.

How are you thinking about a potential launch in 2024? What is the company's strategy? Would you market Roliparadone by yourselves or would you seek a partner? And do you think you would start hiring sales reps in this year or would you rather wait until the actual?

approval decision later in 2020.

later in 2024. Thank you.

Thank you. Good question. You know, we think about how this is going to evolve over time and certainly, you know, something of this size would require most likely, you know, some assistance. So we have something that we consider is, you know, a partner type of partner that makes sense for us.

But, you know, one step at a time. So, we're, you know, while we look to see what our needs would be in order to be able to launch sooner than later, you know, we're still evaluating that at this time.

Thank you. Congratulations. Thank you.

Thanks, Seth. Thank you. Congratulations. Thank you. One moment for our next question.

We have a question from Douglas Sal with ATWainwright. Your line is open.

Hi, everyone, and thanks for taking the questions. Can you remind us, I believe, in some of the interactions you've had with the FDA leading into the NDA filing, they had identified some other issues besides the conduct of the Phase 2-3 study. Thanks, again, DR.

Can you remind us, have those all been resolved or were some of those identified as issues that the agency needed to consider during the review process?

No, so good question. So what we have done during this meeting we had with the FDA, we really addressed in our presentation all the issues which have been raised by the FDA.

I think the consequence is that they filed our NGA, so probably we addressed most of the topics which were raised, but as you know I mean...

Now we are at a review of the NDA and now we are going to the in-depth review of the different parts of the NDA. So now we will have, as I said before, back and forth in terms of questions. I am very confident that we will be able to address the questions in my term.

a more in-depth review of some of the topics that you already raised, but I think it's fair to say that we were probably able to show at minimum to the FDA that it is important to review this NDA and to go into the details of the different topics. But, thank you. Thank you.

No new topics, just I think a re-explanation, a re-assessment of the different topics raised and this led to the filing.

Okay, great. And then can you just remind us for self-directed what remaining economics you may be entitled to or might be eligible to receive?

Great. And then can you just remind us for self-direction what remaining economics you may be entitled to or might be eligible to receive? I think this is for Jeff.

Yeah, thanks for the question, Doug. So we have approximately $95 million left in terms of the milestones in the agreement that we signed with Royalty Pharma. There's a $10 million milestone which is dependent on the phase three clinical study.

And then there's approximately $60 million related to regulatory approval in various different geographies.

Okay, and then the rest would be commercial, related to commercial? That's correct. Okay, great. Thank you very much.

Thank you. And I'm showing no further questions. I'd like to turn the call back to Remy Luthringer for closing remarks.

Thank you so much. Thank you all for being with us today. I think it is a very, very important event which happened that the FDA filed our NDA. Keep in mind that this is the first drug seeking to improve negative symptoms in patients suffering from schizophrenia.

approved treatment for negative symptoms currently approved in the US. So I wanted also to thank again for the time and the listening from the FDA during the meeting we had with them recently which led to the finding of our of our

I am really looking forward to the exchange with Psychotic Division in order to really move forward and hopefully go to an approval of Rolle perenden. Thank you again and we will keep you updated.

when you're moving along and each time news are coming to us. Thank you so much and have a good day. This concludes today's conference call. Thank you for participating. You may now disconnect.