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Minerva Neurosciences Inc (NASDAQ:NERV)
Q3 2019 Earnings Call
Nov 4, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the Minerva Neurosciences Third Quarter 2019 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.minervaneurosciences.com. As a reminder, today's call is being recorded.

I would now like to turn the call over to William Boni, Vice President of Investor Relations and Corporate Communications at Minerva. Please proceed.

William B. Boni -- VP of IR & Corporate Communications

Good morning. A press release with the Company's third quarter 2019 financial results became available at 7:30 AM 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; Mr. Geoff Race, Executive Vice President, Chief Financial Officer and Chief Business Officer; and Mr. Rick Russell, President. 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 September 30, 2019 filed with the SEC on November 4, 2019.

Any forward-looking statements made on this call speak only as of today's date, Monday, November 4, 2019, 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.

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Thank you, Bill, and good morning everyone. Thanks for joining us today. As we near the end of this year, I would like to review the progress we have made during 2019 in each of our clinical-stage programs.

First, we have completed and read out top-line results from four trials with seltorexant in major depressive disorder, MDD and insomnia. Second, we have concluded enrollment in Phase 2b trial with MIN-117 in MDD, and we expect to have top-line results in the fourth quarter of 2019. Finally, we have advanced patient enrollment in our pivotal Phase III trial with our lead product roluperidone and we have resumed the pacing of patient recruitment following the temporary delay we discussed in October.

Beginning with Phase III trial with roluperidone enrollment rates have returned to expected levels. As we stated last month, we remain on track to complete enrollment of 501 patients at approximately year-end. In assessing the impact of the recent pause in recruitment that we discussed in October, we considered expanding the number of trial sites to compensate for slower enrollment, but we chose to not jeopardize the integrity of the study and elected to maintain quality over speed.

This randomized, double-blind, parallel group, placebo-controlled 12-week trial is designed to evaluate the efficacy and safety of 32 milligrams and 64 milligrams of roluperidone as monotherapy in other patients suffering from negative symptoms of schizophrenia. The primary endpoint of this trial is a change from baseline in negative symptoms using the Positive and Negative Syndrome Scale, PANSS Marder's negative symptoms factor score NSFS, over the 12-week double-blind treatment period.

After 12 weeks patients enter into a 40-week open-label extension period during which those on active drug during the double-blind phase continued to receive the original dose, while patients on placebo are randomized to receive either 32 milligram or 64 milligram of active drug, if they elect to enter the extension period.

Key secondary endpoints includes a Personal and Social Performance scale PSP and Clinical Global Impression of Severity CGI-S. This trial is addressing a significant unmet medical need negative symptoms in schizophrenia for which no treatments are approved. Our overriding objective is to maintain the quality of patient screening and selection to ensure that all enrolled patients strictly meet the study's pre-defined entry criteria.

Other activities related to the roluperidone program specifically preparation for the filing of a new drug application remain on track. For example, during the past quarter, we entered into a commercial supply agreement with Catalent, under which we will transition from pilot to commercial-scale manufacturing and packaging. We remain confident in the potential of this trial to generate the product profile that we select and an exciting new therapeutic approach to treating negative symptoms in schizophrenia.

Moving to MIN-117, we have completed enrollment in a Phase 2b trial of a total of 360 adult patients diagnosed with major depressive disorder, without psychotic features and with at least moderate levels of anxiety. We believe that patients with this disease characteristics may benefit, particularly from treatment with MIN-117 based on the pharmacological profile of the molecule shown in earlier clinical testing.

The study design includes a screening phase, a six-week double-blind treatment phase and a two-week post-study follow-up period. The primary objective of this trial is to evaluate the efficacy of two doses of MIN-117, 5 milligram and 2.5 milligram compared with placebo in reducing the symptoms of depressed mood, as measured by the change from baseline in Montgomery-Asberg Depression Rating Scale, MADRS total score over six-week treatment period.

Secondary objectives include first assessment of the change from baseline in symptoms of anxiety using the Hamilton Anxiety Scale HAM-A. Second is a change in severity of illness using the Clinical Global Impression of Severity Scale CGI-S, and Clinical Global Impression of Improvement Scale, CGI-I and third safety over six weeks of treatment.

In addition to these measurements, we also plan to assess cognition, sexual function, sleep, and onset of action in mood improvement. We expect to have top-line results from this trial in the fourth quarter of 2019.

Our last clinical-stage product seltorexant is under co-development with Janssen Pharmaceutica During 2019, we completed and announced top-line results from 3 Phase 2b trials and one Phase 1b trial with seltorexant, also known as MIN-202. Three of these trials were in MDD, and one was in insomnia disorder.

As a published this results in details recently, I would like to summarize key cumulative conclusions following completion of these trials. First, seltorexant shows meaningful and consistent improvement in mood and sleep symptoms. In the presentations, seltorexant shows improvement in mood as monotherapy, and as add-on therapy to SSRIs or SNRIs, and its effect the mood stronger in patients with insomnia.

Among the doses of statistics, the 20 milligram dose of seltorexant shows the most robust and consistent effect on mood. In both other and elderly subjects, seltorexant improves both sleep induction and sleep maintenance compared to zolpidem. The safety and tolerability profile of seltorexant cannot be discriminated from placebo. We believe the data from this study is defined a new mechanism of action, selective orexin-2 receptor antagonism, that shows benefit over current treatments for both in insomnia and MDD, and with an encouraging safety profile.

We're currently discussing the next steps in the program with Janssen. The trials, I have described defines a focus of our activities during the year, we have moved roluperidone, seltorexant that MIN-117 forward significantly in clinical testing. We look forward to the next steps into development and regulatory pathways for this exciting product candidates, which we believe a highly differentiated from currently approved products in that target indications.

I would now like to turn the call over to Geoff for our financials.

Geoff Race -- Executive Vice President, Chief Financial Officer and Chief Business Officer

Thank you. Remy. Earlier this morning, we issued a press release summarizing our operating results for the third quarter ended September 30, 2019. 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, restricted cash and marketable securities as of September 30, 2019 were approximately $60 million. We believe that the company's existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months from today, and into mid-2021.

Research and development expenses for the three and nine months ended September 30, 2019 were $9.7 million and $29.6 million respectively compared to $8.4 million and $25.9 million for the same periods in 2018.

General and administrative expenses for the three and nine months ended September 30, 2019 were $4.6 million and $13.9 million respectively compared to $4.1 million and $12.2 million for the same periods in 2018. The increase in G&A expenses during the three-month period was primarily due to higher professional fees to support pre-commercial activities, and then the nine-month period, the increase also included non-cash stock-based compensation expenses and salary costs.

The company reported a net loss for the three and nine months ended September 30, 2019 of $14 million and $42.3 million respectively or $0.36 and $1.08 per share, respectively compared to $12 million and $37 million respectively or $0.31 and $0.95 per share respectively for the same period in 2018.

Now I'd like to turn the call back to the operator for any questions.

Questions and Answers:

Operator

[Operator Instructions] And our first question comes from Biren Amin from Jefferies. Your line is now open.

Unidentified Participant

Yes. Hi, good morning guys. This is Jean for Biren. Remy, correct me if I'm mistaken, but in your prepared remarks you stated that you will be expanding the number of sites to counter the recruitment delays the roluperidone Phase III. Could you elaborate on this decision, and on the quality of these sites, and perhaps which countries they are coming from? And I have some follow-up questions?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Hello, I think maybe my English is not good enough. No, we -- it's exactly the opposite. So what I was saying is that we obviously are, always contemplating to add additional sites. But clearly, as you know, I'm not a fan of adding sites for obvious reasons of variability and to do this so late in the process for recruitment would not be wise. So definitely sorry again, if my English was not good enough. But I mean, definitely we have not added any sites.

Unidentified Participant

Okay, thank you. And just in your 10-Q that you had published this morning, it looks as though you've also recently completed some drug-drug [Phonetic] interaction studies for roluperidone, and have recently analyzed some of the preliminary data that showed minimal interaction. Could you elaborate on the studies and perhaps what those results specifically shown?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Sure. And I think we already addressed this the last time, but I mean. So what we have done, I mean, and this is obviously an agreement of what we have discussed with the FDA at the end of the Phase II meeting, the biggest interaction studies we had to perform was interaction with two cytochrome 300, P450 2D6 and 304. So, we have completed these two studies. I mean the interactions with 2D6 and 3A4 and the effect on the exposure levels of MIN-101 and MIN-101 is the active part of the molecule and on the different metabolite is really marginal. And that's the reason why, I mean these are extremely very good results because they show that indeed. I mean obviously the drug is a drug for monotherapy. But I mean, it can also be given in add-on because the IA [Phonetic] aspect is really minimal.

Unidentified Participant

Got it. Thank you. And also just regarding MIN-117, it looks as though you've filed a new patent application related to neuropathic pain. Could you perhaps provide some color on the mechanism of action of 117 in pain. And is this an indication you plan to pursue?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Yes, I mean, so I think the results -- so again, I mean this results all pre-clinical models. But as you know in this area, the pre-clinical models are extremely predictive of what you will see in clinic. So I mean we have really, really exciting results there and that's the reason why the we filed it. So how we came to this idea to this research was I mean as you know [Indecipherable] for example like Duloxetine also having an effect on some pain models and have even [Indecipherable] clinics. So we really wanted to deeply going into this understanding. And I think our molecule has a much better results as what you can see currently available. And so now concerning the mechanism of action, it is obviously difficult to come to a final conclusion, we are still working on this. As you know, MIN-117 is an extremely rich pharmacology combining serotonergic pathways and dopaminergic pathways. You can always guess or based on this results mostly is serotonergic pathway which is implicated in the control of pain. But I think to come up with a firm conclusion that to date of possible, but clearly [Indecipherable] this pharmacology, this complex pharmacology, this rich pharmacology has an incredible effect on pain model,

Unidentified Participant

Great. And just maybe one more quick one from me, it looks like you've also had some results for MIN-301 in a primate model of Parkinson's. When do you intend to file the IND for 301?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

So I mean we are -- we have really started as a pre-clinical package. We had a little bit struggles with bio-analytical method and now this is really solved because as you know, I mean, here we are working with the extra-cellular domain of Neuregulin-1b1 and you need to have a very sophisticated methods in order to really discriminate between endogenous secretion of Neuregulin and MIN-301. We have now solved this problem and now we can go full speed with the pre-clinical package. So we are really I think on track to be ready for an IND filing during the course of next year.

Unidentified Participant

Okay. Thank you very much.

Operator

Thank you. Our next question is from Joel Beatty from Citi. Your line is now open.

Unidentified Participant

Hi, this is John calling in for Joel. Two from me this morning. Can you remind us what time-lines are around the next steps for seltoretant and any developmental decision toward Janssen?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

So as I mentioned in my presentation or in my script is that we are really, I mean, working with our colleagues from Janssen to really come up with the best plan moving forward. We are really advancing very well. We have, obviously a lot of debates because as I already explained, I think in the past is that this molecule gives so many opportunities due to the fact that, I mean, it is definitely a great drug for insomnia. I think it is drug which is really doing something on hyperarousal which is obviously something which is important in insomnia, and it is also translating some effects on mood. And as I mentioned, this effects on mood are more pronounced, if I mean, you have a complains of insomnia in the patients. Now, the next step is that we very soon going to have an end of Phase II meeting with the FDA and obviously also we are seeking for generic advise in Europe. And based on this feedback, so which will be happening very shortly, we will be able to finalize the plans and move forward. So again, stay with us a little bit and we will update you when we have all this feedback and we have the possibility to finalize our complete block of plan.

Unidentified Participant

Great. And then as a brief follow-up for roluperidone, do you anticipate you will need to wait for the 12 months safety data prior to filing or will be able to file ahead of them?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

This is obviously a great question. So definitely the primary endpoint is on the 12 weeks, double-blind phases. So clearly, this will be the moment where we start to file. And I think we can really gives the 12 months safety data because as you know, the 12 months is really, particularly talks about 100 patients with 12 months safety data I think this can be given or it can be added to the NDA in a rolling base. And I think we really do not have to worry, I mean we were really start to interact with the FDA when we have the blind phase results

Unidentified Participant

Great. Thank you so much, Remy.

Operator

Thank you. Our next question is from Jason Butler from JMP Securities. Your line is now open.

Roy Buchanan -- JMP Securities -- Analyst

Hi, thanks for taking the question. This is Roy in for Jason. I just had a follow-up on the end of Phase II for seltorexant, has that been scheduled with the FDA?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

So the submission have been done and we are waiting for a date.

Roy Buchanan -- JMP Securities -- Analyst

Okay, great. And then can you remind us for the roluperidone on the data breach on the Phase III. Did you discuss that with the FDA as well and did they recommended any changes to the conduct of the trial or have any other comments on your plans that you can share? Thanks.

Remy Luthringer -- Executive Chairman and Chief Executive Officer

No, definitely. I mean, we had a full agreement with the FDA when we had the end of Phase II meeting, and we really deeply analyzed our Phase 2b data which as you know, have been analyzed like pivotal or a registrational study. So clearly, I mean, it was a very smooth discussion and nothing has changed since we have submitted the protocols Phase III protocol to the FDA. We obviously exchanging with FDA on a regular base because this is how it is when you're going into late-stage development. We have obviously exchanged in terms of CMC. We had also meeting concerning CMC. So we have a lot of exchanges, but -- in terms of study design, the study protocol primary endpoints, nothing has changed since we had the end of Phase II meeting.

Roy Buchanan -- JMP Securities -- Analyst

Great. Thank you.

Operator

Thank you. Our next question is from Jessica Schmerler from Chardan. Your line is now open.

Jessica Schmerler -- Chardan -- Analyst

Hi. Thanks for taking my question. Just one quick one from me. In terms of the cash runway through mid-2021, is that making any assumptions about the outcome of the decision with Janssen or is there any possibility that may change after that decision is announced?

Geoff Race -- Executive Vice President, Chief Financial Officer and Chief Business Officer

Yes, Jessica the cash burn rate over the last couple of years has been around about $11 million a quarter, but we expect that to drop significantly over the next year, as we run out the extension period in roluperidone and we prepare for the next steps with 117, and so direction and obviously as we get clarity on those plans we'll make adjustments to our cash predictions, as necessary.

Jessica Schmerler -- Chardan -- Analyst

Great. Thanks so much.

Operator

Thank you. Our next question is from Myles Minter from William Blair. Your line is now open.

Myles Minter -- William Blair -- Analyst

Hi guys. Thanks for taking the questions. I'm just wondering about the proportion of US to EU patients in the roluperidone programs. Sorry to hop on about this, but particularly in the open label extension portion of that program, does the FDA care about the proportion of patients from US versus EU in that for potential safety database read out and also how is the update on enrollment in for that portion of the arm? Are you seeing any dropout rate that would be comparable to the double-blind phase of that trial? I've got a follow-up after that. Thanks.

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Obviously, this is a great question and I think, as I explained already in the past. I mean we really have done this in a very interactive way with the FDA. Yes, I mean so. So clearly, I mean what has been agreed is that, I mean we will do our best efforts in order to come as close as possible to 30% of the patients coming from the US. But again, that will be crystal clear, this was not mandatory, this was the best efforts and so what I mean, the FDA and we are really discussed this I think extremely open-minded and clearly the objective here is that from the overall study combining patients from Europe and from the US, this is a primary endpoint , so the complete study or the complete 501 patients. And what the FDA would like to see and we discussed this with our advisors very carefully and some of the advisors are had been heavily [Indecipherable] divisions before. So you can guess who it is, who are really very clear because they want to see if I mean, the US patients going into the same direction in terms of improvement of the negative score of the PANSS scale, as according to the MADRS score. But I mean this is the only objective here, we have to also to the only box to pick basically. So again 30% is best efforts.

Myles Minter -- William Blair -- Analyst

Okay. So just to clarify, there is no difference in the expectations in the efficacy portion of the trial and the open-label extension safety portion of the trial? As to how many patients in the US and the EU, they would require?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

I think the overall safety is important. And as of today, what I can tell you is that this is just good practice, it's even recommended in the guidelines, what we are doing, we are monitoring completely blinded, putting all the patients in the same pot because obviously always blinded so [Indecipherable] of our molecule versus placebo. And we are really checking how the scale is behaving here in terms of efficacy. And what I can tell you is, when you are going blind, you don't see any difference between the different patients from whatever region of this planet you're coming, is Europe or US. In terms of safety, it is exactly the same. I mean there is nothing, which is popping up, which is a different between again -- all this is blinded obviously but I mean popping up between the US patients and the European patients. So I think as of today, again, all being a completely blinded, but we thought very carefully, it is [Indecipherable] clearly impossible to see any difference between US based and European patient. And I think it is really a very important point here is, yes, indeed, I mean in terms of screening, we have much more screen failures in the US, which I think is something which is extremely good in my view, because I mean, it shows that I mean we are really picking up the right patients. And as you know in the US I mean recruitment is done often by advertisement. So it's normal that you have more screen failures, because I mean, you have a little bit more noise coming in, but I mean I think our filter is really working well, that there is no that we have more screen failures. But when the patients are in the study, and as I explained before, in terms of safety, in terms of efficacy, we cannot see any difference between US and European patients.

Myles Minter -- William Blair -- Analyst

Okay, that's helpful. And then just on MIN-117, what are the powering assumptions on the MADRS scale for that trial, is it 2.5 point difference over placebo, I think I've heard that is the sort of clinically meaningful threshold there. And theoretical scenario, do you have enough US patients in that trial, that if the data is good, that you could potentially apply for breakthrough designation for that drug, as we're seeing with some peer companies in the space using their early Phase II trials is one pivotal and a single Phase III for approval in that later stage?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

So these are two great questions. I mean, so in terms of powering, I mean, yes, indeed, I mean, you go out with 2.5 points but that obviously based on what we have seen in this very small Phase 2a study, I mean we can't really hope to see a greater delta, yes, between the treatment and placebo. Keep in mind that, I mean in this Phase 2b trial, we are using a 2.5 milligram and 5 milligram, whereas in the small Phase 2a study, we used 0.5 milligram and 2.5 milligram. So really here, I mean, depending on the pharmacology, and I think by increasingly exposure or hitting more pathways with our molecule, we should really see a really good effect with 2.5, where we have already, a very good hint that I mean it's definitely more than 2.5 points and we strive hopefully we will see more. Now concerning your second point about the number of US patients, interestingly enough in this study, we recruited extremely well in US. So yes, I think it's a data are extremely good. We can always contemplate all different options pool within in order to contemplate all the different options herein.

Unidentified Participant

Okay. Thanks very much for the questions. Look forward to the Janssen update, when it comes out. Thanks.

Operator

Thank you. Our next question is from Douglas Tsao from HC Wainwright. Your line is now open.

Douglas Dylan Tsao -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Hi, good morning. Thanks for the questions. Just you know maybe Remy, just in terms of MIN-117. Just curious if things play out as we hope and expect, the interest in advancing that into Phase III by yourself versus potentially seeking a partner like you did with seltorexant?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Yes. Again a great question. So again, as I think you said it correctly. I mean let us see the results, let us see where we land with these results, and I think based on these results, we will contemplate the different options. But so give us a little time and let us wait for the results, please, Douglas.

Douglas Dylan Tsao -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Okay, great. And so, meaning that there are scenarios where both of those options would make the most sense?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

When you're running a company like ours with strong molecules where you have different types of options, different indications. I mean, take a roluperidone, roluperidone as you know, a negative symptoms, if we have a positive readout here. We know that negative symptoms are in 19 different diseases, if you [Indecipherable]. So I mean it becomes, obviously a very, very huge portfolio with a lot of indications. So you have to be open and listen to the different options. As of today, I mean, let us first have the readout of the data and we will update you on what next.

Douglas Dylan Tsao -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Okay, and then just in terms of roluperidone, in terms of the breakdown between US and Europe enrollment. Have you seen any change in terms of dropouts between the two regions or has that been largely the same?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Can you repeat the end. I did not hear the end?

Douglas Dylan Tsao -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Just in terms of drop out -- any difference between the drop out rate between the two regions for roluperidone?

Remy Luthringer -- Executive Chairman and Chief Executive Officer

No, the answer is -- the short answer is, no. We have not seen any difference. It really depend on the site-by-site, I mean, I think here, I mean, when you have selected to right site, and I think again in the US, as I explained, I mean the screening is related to the fact of the way the patients are recruited. But once the patients are in the study, definitely there is no difference at all. So you have to follow each site, you have to really be close. I mean obviously through our [Indecipherable] with each site, I mean if you have the feeling that something is not completely perfect, I have to say that we're not to intervene a lot to or you know to go back to the sites and to reexplain what we're trying to achieve here. So clearly, I mean long story short, I mean, we don't see a difference between US sites and the European sites in terms of [Indecipherable].

Douglas Dylan Tsao -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Okay. Great. Thank you so much.

Operator

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Remy Luthringer, for closing remarks.

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Thank you all for these great questions and those interested in our molecule. So, it is true that we have a very exciting weeks and few months ahead of us, and I am really, really looking forward to update you on all the results coming out, after a very successful result of the first molecule. So seltorexant, I mean two other molecules we read out very soon and really looking forward to update you. Thank you again for being on this call. Thank you and bye-bye.

Operator

[Operator Closing Remarks]

Duration: 34 minutes

Call participants:

William B. Boni -- VP of IR & Corporate Communications

Remy Luthringer -- Executive Chairman and Chief Executive Officer

Geoff Race -- Executive Vice President, Chief Financial Officer and Chief Business Officer

Unidentified Participant

Roy Buchanan -- JMP Securities -- Analyst

Jessica Schmerler -- Chardan -- Analyst

Myles Minter -- William Blair -- Analyst

Douglas Dylan Tsao -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

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