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spk03: Welcome to the Minerva Neurosciences third quarter 2021 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 investor 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 Jeff Race, President of Minerva. Please proceed.
spk06: Good morning. A press release with the company's third quarter 2021 financial results and business highlights became available at 7.30 a.m. Eastern Time today and can be found on the investor 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 Auerholm, Chief Financial Officer. Following our prepared remarks, we will open the call for Q&A. Before we begin, I'd 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. 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 in our filings with the SEC, including our quarterly report on Form 10-Q for the quarter ended September 30th, 2021 filed with the SEC earlier today. Any forward-looking statements made on this call speak only as of today's date, Monday, November the 8th, 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 Remy Lutringer.
spk04: Remy Lutringer Thank you, Jeff, and good morning, everyone. Thanks for joining us today. I would like to focus this morning's update on our lead program, ROLI paradigm. On September 30th, 2021, we announced the results from a pivotal bioequivalence study where the results met key pharmacokinetic objectives and demonstrated bioequivalence across the various formulations. We call the objective of this study was to compare the formulations employed in the Phase IIb and Phase III trials, as well as a planned commercial formulation designed in conjunction with our commercial supplier to facilitate large-scale manufacturing. In this type of study, the area under the curve to last detectable concentration, AUC last, the area under the curve extrapolated to infinity, AUC infinity, and the maximum plasma concentration, Cmax, are the most commonly used plasma pharmacokinetic parameters to evaluate bioequivalence between various formulations. For roliparidone, Our earlier work has shown that efficacy in patients with negative symptoms of schizophrenia is mostly driven by plasma exposure of the drug, i.e. AUCs, whereas safety margins improved by reducing Cmax of the drug. Furthermore, as ronipiridone is intended for chronic use and the assessed formulations are controlled release, AUC infinity is the most relevant of the AUC measurements when single-dose data are collected and used for determining bioequivalence. In this study, the two most important objectives were to establish, firstly, the comparability on the fasted conditions of the 64-mg tablet of the Phase III formulation of proliferidone compared to the 64-milligram dose based on the administration of two 32-milligram tablets of proliferidone used in the Phase IIb study. And secondly, the comparability and the fasting conditions of a 64-milligram tablet of the planned commercial formulation of proliferidone compared to the 64-milligram dose based on the administration of two 32-milligram tablets of proliferidone used in the Phase IIb study. The data showed that both objectives were met. The AUC infinity were bioequivalent and the Cmax of the reformulated phase three and planned commercial formulations had been reduced substantially compared to the phase two B formulation. In this study, we also demonstrated bioequivalence in terms of AUCs and Cmax between the 64 milligram formulation of the planned commercial tablets and the phastic conditions compared to the formulation used in the phase three. And bioequivalence both in terms of AUC infinity and Cmax of the 64 milligram dose of the planned commercial formulation and the fed and phastic conditions. In summary, I believe the bioequivalence study results represent important progress along Minerva's critical path towards submission of an NDA for roliparidone. Moving on to our recent correspondence with the FDA. Last week, we announced that the FDA had denied the company's request for a pre-NDA meeting for roly-peridone and proposed that the type C guidance meeting would be more appropriate. Therefore, the company plans to request the type C meeting. And so to conclude my update this morning, the successful completion of the bioequivalent 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 Dr. Ramana Kuchibatla as our new head of R&D at Minerva. I will now turn it over to Fred for the financial update.
spk05: Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the third quarter and to September 30th, 2021. A more detailed discussion of our results may be found in our quarterly report on Form 10Q filed with the SEC earlier today. Cash, cash equivalents, restricted cash, and marketable securities as of September 30th, 2021 were approximately $65.7 million compared to $25.5 million as of December 31, 2020. Our cash position was strengthened significantly in January 2021 with the receipt of a $60 million upfront cash payment from Royalty Pharma in connection with Royalty Pharma's acquisition of the company's royalty interest in Celtorexin. Under this agreement, Minerva has the potential to receive up to a further $95 million in additional payment contingent upon the achievement of certain clinical, regulatory, and commercialization milestones by Janssen. As a result of the sale of Minerva's interest in the Celtorexin royalty stream to Royalty Pharma, Minerva will recognize non-cash interest expense related to the amortization of this future revenue stream as compared to the cash payments ultimately received from Janssen. Accordingly, for the three and nine months ended September 30th, 2021, Minerva recognized $1.7 million and $4.6 million, respectively, in non-cash interest expense related to this agreement. The $60 million payment received from Royalty Pharma has been included on our balance sheet under liability related to the sale of future royalties. As we recognize interest expense, the liability related to the sale of future royalties will increase until such time that we begin to receive the related royalty payments which will thereafter reduce the 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 Janssen was to discontinue the self-direction program for any reason, Minerva has no obligation to repay any amounts received from Royalty Pharma. 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. The assumptions upon which this estimate is based are routinely evaluated and may be subject to change. For the three months ended September 30th, 2021 and 2020, research and development expense was $4.5 million and $4.6 million, respectively, a decrease of approximately $0.1 million. For the three months ended September 30th, 2021 and 2020, non-cash stock compensation expense included within R&D was $0.5 million and $0.8 million, respectively. For the nine months ended September 30th, 2021 and 2020, R&D expense was $13.3 million and $18.5 million, respectively, a decrease of approximately $5.2 million. The nine months ended September 30, 2021 and 2020. Non-cash 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 30, 2021 versus the same periods in 2020 was primarily due to lower costs for the Phase III clinical trial of Roloperidone. for which the three-month core study portion of the trial was completed in May 2020. For the three months ended September 30, 2021 and 2020, general and administrative expense was $3 million and $3.5 million, respectively, a decrease of approximately $0.5 million. For the three months ended September 30, 2021 and 2020, non-cash compensation expense included within G&A was $0.6 million and $1.2 million respectively. For the nine months ended September 30th, 2021 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 30th, 2021 and September 30th, 2020, non-cash 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-month periods ended September 30, 2021, was primarily due to non-cash stock compensation charges resulting from certain stock option awards approved in June 2020, as well as from additional stock compensation expense incurred under a severance agreement during 2020. Net loss was $9.2 million for the third quarter of 2021, or net loss per share of 22 cents, basic and diluted, as compared to a net loss of $8.1 million, or net loss per share of 19 cents, basic and diluted, for the third quarter of 2020. Net loss was $28.6 million for the nine months ended September 30, 2021, or net loss per share of 67 cents, basic and diluted, as compared to net income, of $9.3 million, or net income per share of 23 cents, based, again, alluded, for the nine months ended September 30th, 2020. The decreases in net income for both the three and nine-month periods ended September 30th, 2021, were primarily due to the company's opting out of its joint development agreement with Janssen Pharmaceutica for Celtorexin during the second quarter of 2020. As a result of opting out of the agreement, the company immediately recognized $41.2 million in 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?
spk03: Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Our first question comes from Andrew Sy with Jefferies. Your line is open.
spk01: 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, on completing the bioequivalence study. You know, my understanding is the FDA generally takes at most 75 days to schedule a Type C. Last year, sounds like you received minutes within 20 days of your Type C meeting, and you came back to the street a day afterwards, I believe. So basically, you know, Can we expect a type C meeting outcome to happen, say, within two to three months? Or can you give a more granular timeline, you think? Thanks. That's my first question.
spk04: Yeah, hello. Andrew Remy speaking. Yes, thank you for your question. So, as you know, I mean, the timelines for a type C meeting is based on low, yes? I mean, so definitely it is a process of 75 days. But it is also true, yes, that... Last year when we had our type C meetings, things came back much quicker from the agency. So I think today we have to stick to this, how to say, 75 days basically. And obviously we have immediately reacted. And so your estimate is probably adequate. So it is a 75-day process indeed.
spk01: Got it. Thank you. And another question is just more about, the FDA, why they think a type seeding would be more appropriate than a pre-NDA. I mean, should we be inferring? Maybe the FDA is still very unsure of whether the topics that you guys discussed in the last type seeding may not have been fully addressed. I guess the root of the question is what prompted the FDA to do this instead? Thanks.
spk04: So obviously I'm not at the place of the FDA, yes, but I think to ask specifically about monotherapy is a completely fair question. As you know, we have done our development in monotherapy for very obvious reasons. The first one being the fact that if you want to claim for a specific effect on negative symptoms, This is at minimum, in my opinion, and it has been recently published by a group of experts of KOLs. This is probably the only way, I mean, to do a study, monotherapy versus placebo, in order to really pick up a specific effect on negative symptoms. So I think it is a really important debate here or question. Keep also in mind that, I mean, common practice and it's mostly focused on positive symptoms indeed but I mean common practice is to try to keep someone who has a diagnostic of schizophrenia treated with antipsychotics so when you are putting these two pieces together I mean you might have a discussion around why monotherapy is and I think we have a really good set of data together because remember we recently or a few months ago now time is running we we have disclosed of the the results of the open label extension where I mean definitely you can see an improvement of negative symptoms but this is in parallel you have definitely some improvement in terms of positive symptoms or at minimum stability of positive symptoms staying at a very low level after monotherapy with voliparidone and if you remember we had an extremely low relapse rate. So basically patients who are presenting with positive symptoms or psychotic symptoms over this period of one year where we followed the patients. So when you're putting all this together again, I think it's a fact to have a very, very good discussion about monotherapy based on our data. I'm really hopeful that we'll have... the right output and the right input and the right output at the end of the day from this meeting in order to move forward.
spk01: Yes, makes sense. Thank you for all the color and fingers crossed.
spk04: Yes, thank you so much, Andrew.
spk03: Thank you. Our next question comes from Tom Schrader with BTIG. Your line is open.
spk07: Good morning. Let me add my congratulations for the bridging study. That's a nice result. Very 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 did they see in your request for a pre-IND meeting? And then kind of a follow-up is, do you expect to have to go to this meeting with the next trial sort of flushed out, or would that be a subsequent discussion? So thank you.
spk04: Great questions. So clearly the FDA has not seen a lot, or to be very clear, nothing about the extension data part of what we see in the press release we have put out about these results. And as you know, when you're doing a meeting request, you're not going into the details. You're mostly... going through some of the questions you might have to put in your briefing book and you might want to discuss during the pre-NJ meeting. So, long story short, the short answer is that they have no insight into this data. I think, if I read into your question, I think it is an important piece of information, clearly, to be able to demonstrate what we have demonstrated. Now, concerning the An additional trial, I know very well that, I mean, people think that we should do a trial or we should have started a trial. People think that, I mean, we have enough. I think when you're looking to the guidance of 2019, November 2019, I think we are ticking those boxes because we are dealing with a non-medical need. We're still well-controlled studies. So I think we have a lot here to share and to discuss with the agencies. And, you know, we'll see what comes out from this meeting. And based on the outcome, we will decide. But, I mean, if you're thinking one second about a natural study, you need to know which kind of study. And this will not be the topic of the discussion. We will focus on monotherapy. But afterwards, obviously, we can always discuss about what would be a study. But, again, I am very clear. I think we have what we need in order to have the right discussion, and this clarification and monotherapy makes a lot of sense to me, and hopefully the agency will see the data package we have like a package which can be submitted as far as I'm not hearing.
spk07: Great. Thank you. You're welcome.
spk03: Thank you. Our next question comes from Jason Butler with JMP Securities. Your line is open.
spk08: Hi, thanks for taking the questions and appreciate the updates. Remy, just another one on the type C meeting. Did FDA, has FDA at all indicated whether it now accepts the bioequivalence data or is bridging the phase two formulation or the S2B formulation to the phase three 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, you know, need a pre-IND meeting on top of the or in addition to the Type C meeting? Thanks.
spk04: Jason, so for the first question about bioequivalence, the answer is no, the NDA has not been Since this data, the only things they have seen is, again, you know, what we have released or what we have publicly released. And obviously, when you're doing the meeting requests, as I explained just before, you know, you're just going through the different points or topics you would like to discuss. So, I mean, obviously, you're not going into the details of the results. So, clearly, I mean, they have not the complete granularity of this data. This was a pivotal bioequivalent study, which is basically something which is going according to some guidance. And clearly, I mean, either you're bioequivalent or you're not. In our case, we are bioequivalent for the key parameters, as I explained in my talk just before. So I don't think that there will be any surprise there. Not concerning your second question, you know, I think this more focused discussion about monotherapy and obviously totality of evidence is a wide discussion, and this was definitely a discussion we wanted to have during the pre-NDA meeting as well. So 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 MD and the outcome, but we are still sticking to the submission of our NDA during the first half of next year. So this is what I think I can say about this, but I'm very hopeful that this will be helping us to definitely stay, how to say, with the timelines we have given it.
spk08: Okay, great. And then just one more just to clarify. So obviously there's the monotherapy topic, but in addition to that, are the topics that you plan to propose discussing with FDA at the Type C meeting essentially overlapping with what you would have talked about at the pre-NDA meeting?
spk04: So part of the monotherapy, which was part of it, yes, because obviously we we have developed a drug in monotherapy for the reasons I was explaining before. Yes, I mean, some of the topics are overlapping. The only difference, if you want to find a difference, is that, I mean, in the pre-NDA meeting, you're also going through the different modules of your NDA, like CMC, like preclinical, and so on, yes, I mean, and not only focusing on the clinical aspects, yes. So this is a difference if you want to see a difference. This said, as you know, for example, for the CMC, you can have some specific meetings to check or to tick the boxes, as we have done, by the way, also in the past. So I think there are really ways to really tick all the boxes. before we are going to do our submission. So I think this is the difference. I mean, less focusing on ticking the box for non-clinical aspects and focusing more on the clinical aspects.
spk08: Okay, great. Thanks for taking the questions. Thank you, Jason.
spk03: Thank you. Our next question comes from Doug Russell with HC Wainwright. Your line is open.
spk02: Hi, good morning. Thanks for taking the questions. I'm just curious, Remy, 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 conversation, or I guess, you know, we've, with investors, there's obviously been a conversation whether the best sort of use of the roloperidone is sort of an adjunct versus monotherapy. When you think about going to the agency and your discussion, has it been primarily focused they were exclusively focused as a monotherapy, and do you think, you know, beyond the open label extension data, sort of what do you think are your best sort of points of evidence just to utilize to support that setting?
spk04: So this is obviously an important question as well, yes, and I mean, obviously, I could give a very, very long answer, yes, but But I think the best answer to your question is to, first of all, I think the scientific community is really recognizing that a lot of patients with a diagnostic of schizophrenia, first of all, do not take the treatment if they have the possibility. I'm speaking here about the commercially available treatments. Do not take the treatment if they're have the possibility to stop their treatment. So this is one point. So there is a need of an alternative treatment. The second aspect is that it's quite clear as well, is that the current existing treatments are definitely not improving negative symptoms. There are meta-analyses, a lot of meta-analyses are pointing to the fact that you have a worsening of negative symptoms due to the treatment on top of the negative symptoms of the disease. And it is also true that a lot of work has been done over the last few years to see if you can reduce the dosage of the antipsychotics and does it have an impact on the number of relapses. All this is a very active research going on in terms of better understand the phenotype of the patient at different stages of the disease. And I think it is very clear or becoming more and more clear that the significant part of patients with schizophrenia and having really been bothered with negative symptoms and not functioning do not need continuous treatment with antipsychotics. So this was the hypothesis we had. when we started in addition to demonstrate the specific effect and I think our data are showing that I mean this is possible because keep in mind that we take or we took in the two studies we took patients who were treated or stabilized on positive symptoms or psychotic symptoms with antipsychotics they needed to have a minimum score of negative symptoms and we switched them to our treatment in monotherapy and When you see that these patients are staying stable on positive symptoms at very low level and that the relapse rate is extremely low over one year period of treatment, you know, you have an additional piece of information here confirming that some patients can be without antipsychotics continuously on board. So all this, I think, has to be re-explained, has to be re-discussed in order to, you know, to... to show the full power of the data we have generated and the patient population who might benefit from monotherapy. Obviously, I'm not saying that antipsychotics are not important or the existing treatments are not important because, obviously, I'm not claiming or I'm not saying that aminoripeldone will treat an acute episode of positive symptoms with agitation, with severe hallucinations, delusions. So I think we are just... trying to fill a gap where, I mean, there is no existing treatment here.
spk02: And, Remy, I guess one follow-up to that is do you think that you have sort of enough data to support or would you seek a specific labeling sort of recommendation for Rolopetidone to be 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 would be used as an adjunct or monotherapy?
spk04: I obviously don't have the final answer on this. The reason I'm here is a meeting. What I think basically is that, you know, you can give up a drug in Adam. We never have... promoted this more than that. We have just done the safety aspects of the DDI studies which are needed in order to give our treatment in Adam to antipsychotics. But again, I think to give the best chance to patients to really improve in terms of negative symptoms and at the end of the day in terms of functioning and again because there is a significant, really a significant number of patients who can benefit from monotherapy without having antipsychotics on board all along. I think this is what you have to do and what we have demonstrated and hopefully the FDA will get this. So this is where we are. This is what I'm thinking. It can be given, Adam, but probably the best outcome in most of the cases is not to put antipsychotics continuously on board.
spk02: Okay, great. Thank you.
spk04: You're welcome.
spk03: I'm showing no further questions at this time. I'd like to turn the call back to management for any closing remarks.
spk04: Yes, so thank you, everybody, for today's call and for all the questions and 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.
spk03: 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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