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spk04: Good day, and thank you for standing by. Welcome to Minerva Newer Science's full year 2022 financial results and business update 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'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeff Reiss, President of Nerve Neurosciences.
spk03: Please begin.
spk01: Good morning. A press release with the company's fourth quarter and year-end 2022 financial results and business highlights became available at 7.30 a.m. Eastern Time today and can be found on the Investors section of our website. Our annual report on Form 10-K 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 Almholm, 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 the 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 Securities and Exchange Commission. including our annual report on Form 10-K for the year ended December 31st, 2022, filed with the Securities and Exchange Commission earlier today. Any forward-looking statements made on this call speak only as of today's date, Wednesday, March the 8th, 2023, 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'd now like to turn the call over to Remy Lutringer.
spk02: Thank you, Jeff, and good morning, everyone. Thank you for joining us today for a review of 2022 and our plans for 2023. During the year, we had multiple interactions with the FDA regarding the regulatory path forward for our lead compound Voliparidone for the treatment of negative symptoms of patients diagnosed with schizophrenia. In March 2022, we attended a Type C meeting in which the FDA advised on its remaining concerns, which we outlined in our press release in April 2022. Specifically, the FDA was concerned with the applicability of the Phase IIb data conducted in Europe to the U.S. population, and the Phase III study had not met the primary endpoint. In addition, the FDA sought reassurance that Minerva could reliably identify those patients who do not need antipsychotics and how to evaluate the stability of those patients. The FDA also noted that Roliparidone may be used by prescribers in a way that differs significantly from the intended monotherapy use, and noted that the sponsor had not presented data to show that Roliparidone does not interfere with the safety or efficacy of antipsychotic medications. Following the 5C meeting, Minerva provided additional data, which we believe addressed the concerns raised by the FDA. In August 2022, we submitted an NDA for Roliparidone for the treatment of negative symptoms in patients with schizophrenia. The submission was supported by results for late-stage, well-controlled studies in patients with moderate to severe negative symptoms and stable positive symptoms of schizophrenia. Studies mean 101, C03, phase 2b, and mean 101, C07, phase 3. Both studies had very similar overall study design. Both were multi-sensor, multinational, randomized, double-blind, placebo-controlled, parallel group studies in which patients received either placebo, 32 milligram, or 64 milligram doses of rolipiridone. In both studies, if patients were taking antipsychotic treatments, they were discontinued, and the short washout period was implemented before being randomized to one of the three arms. Both studies captured comparative placebo-controlled data through the 12-week double-blind period. Both studies also provided long-term exposure data regarding the safety and tolerability of roliparidin and efficacy based on blinded doses of roliparidin, specifically intended to demonstrate the maintenance or continuation of improvement in negative symptoms. The stability of positive symptoms and the low rate of relapses of positive symptoms following 24-week study mean 101C03 and 40-week study mean 101C07 open label periods. As mentioned above, with the exception of the duration of the open label period, these two studies were nearly identical with respect to patient population and main assessment tools positive and negative syndrome scale, PANS, personal and social performance scale, PSP, clinical global impression, CGI. As such, the data from these studies were the basis for the decision to submit the MDA. As we believed, they provided sufficient evidence to support the long-term safety and efficacy in adults in an area of high medical need. and consequently merit an in-depth review by the Psychiatric Division of the FDA. In October 2022, we received a refused-to-file letter, RTF, from the FDA and continued, as proposed by the Psychiatric Division, our dialogue at the Type A meeting on November 30th. Following that meeting, the FDA confirmed that the RTF remained in effect. We remain committed to developing Roliparidone as a potential transformative treatment for those patients with negative symptoms of schizophrenia. And we anticipate further discussion with the FDA over the coming months regarding the status of the Roliparidone NDA and the development program. I look forward to provide more information as it becomes available. I will now turn it over to Fred to discuss our financial performance.
spk00: Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the fourth quarter and year ended December 31st, 2022. A more detailed discussion of our results may be found in our annual report on Form 10-K filed with the SEC earlier today. Cash, cash equivalents and restricted cash as of December 31st, 2022 were approximately $36.2 million compared to $60.9 million as of December 31st, 2021. In January 2023, we received a refund of our NDA filing fee of $3.1 million from the FDA. This refund was made in accordance with the Federal Food, Drug, and Cosmetic Act, which allows a fee waiver for a small business submitting its first human drug application. We expect that the company's existing cash and cash equivalent will be sufficient to meet its anticipated capital requirements for at least the next 12 months from today based on our current operating plan. The assumptions upon which this estimate are based are routinely evaluated and may be subject to change. Research and development expense for the fourth quarter of 2022 and 2021 was $3.2 million and $18.7 million, respectively. a decrease of $15.5 million. The decrease in R&D expense was primarily due to an impairment charge of $15.2 million in the fourth quarter of 2021 to the carrying value of in-process research and development related to our MN 301 development program. R&D expense for the years ended December 31st, 2022 and 2021 was $14.6 million and $32 million, respectively, a decrease of $17.4 million. The decrease in R&D expense was primarily due to an impairment charge of $15.2 million in the fourth quarter of 2021 to the carrying value of in-process research and development related to Mn301, as well as lower clinical trial costs during 2022. Non-cash stock compensation costs included within R&D expense for the years ended December 31, 2022, and 2021 was $2 million and $2.4 million, respectively. General and administrative expense for the fourth quarter of 2022 and 2021 was $1.9 million and $2.6 million, respectively, a decrease of $0.7 million. G&A expense for the years ended December 31, 2022 and 2021 was $10.6 million and $13.3 million, respectively, a decrease of $2.7 million. The decrease in G&A expense for both the fourth quarter and year ended December 31, 2022 versus the prior year period was primarily due to lower compensation expense and lower legal and insurance fees. Non-cash stock compensation costs included in G&A expense for the years ended December 31, 2022 and 2021 was $2.1 million and $2.8 million, respectively. For the fourth quarter of 2022, net loss was $6.7 million, or a loss per share of $1.26, basic and diluted, as compared to a net loss of $21.3 million for the fourth quarter of 2021, or a loss per share of $3.99, basic and diluted. For the year ended December 31st, 2022, net loss was $32.1 million, or a loss per share of $6.01, basic and diluted, versus a net loss of $49.9 million for the year ended December 31st, 2021, or loss per share of $9.35, basic and diluted. Now I'd like to turn the call over to the operator for any questions. Operator?
spk04: Thank you. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone. To withdraw your question, please press the pound key. I'm sorry, please press star 1-1 again. Please wait for your name to be announced.
spk03: Please stand by, we'll compile the Q&A roster. Our first question comes from the line of Andrew Tsao with Jefferies.
spk04: Your line is open.
spk05: Hi, good morning. Thanks for all the updates. So, the first question is, can you possibly remind us the latest and greatest outstanding issues the FDA has following your recent Type A meeting with the NDA? I think last time you said the FDA did propose a few items in mind, and you'd kind of share it with us. But I'm just curious, what are those things that cause the FDA to issue the RTF and then maintain their stance afterwards? Thanks.
spk02: Yeah. Hello. Really great question. So clearly, I mean, as we mentioned, yes, we already outlined what were the concerns after the type C meeting we had with the FDA, yes, in April last year. So that clearly, I mean, I think we've made a lot of progress, but I think the two main points, and as we mentioned as well, are the fact that, you know, they are still struggling with the applicability of the Phase IIb study, the C03 study results. Otherwise, they suggested or they had really confirmed that this study is a positive study. But I mean, they are struggling with the fact that this study has no U.S. patients. So they want really to be sure that U.S. and non-U.S. patients are similar. I mean, in terms of disease, in terms of negative symptoms, and mostly in terms of negative symptoms because, as you know, There is no drug approved for negative symptoms, so they want to be extremely sure about this. So this is the first point. And the second point, they are still having some concerns about the Phase III study. And this is due to the fact that we have used a Type I correction, which is the Hochberg correction. And as you know, for a Hochberg correction, you need to have the truth of this hitting a p-value of 0.05. And in our case, it is only the highest dose which has hit the p-value of 0.05. So it's, in my opinion, really technical, and it is not at all telling you if the drug is working or not. But I mean, so this is one of the two main concerns. So if you allow me, let me comment on the two concerns. So the first one, we continue to have the dialogue with the FDA, and we are providing them with data showing that basically, I mean, the patients we have included in ex-U.S., so outside the U.S., compared to the patients we've included in the U.S. Keep in mind that for the phase three, we had patients from the U.S. are extremely similar in terms of baseline, in terms of the effect of our drug on the negative symptoms and on the overall disease. We even have provided the information or data from other studies which have been performed by other sponsors in order to make our case even stronger. So I'm really confident that this is something which we will overcome. Now concerning the the phase three study uh yes indeed i mean uh only the 64 milligram dose uh hit the 0.05 p value but uh but keep in mind that i mean as we already uh disclosed we are our mda is asking for an approval of 64 milligram only yes we are not asking for an approval for 32 milligrams so so clearly i think uh which are looking really to what we have seen in the phase three with 64 milligram. It is very, very similar to what we have seen in the phase two B study. And something which is extremely important is that, I mean, we had only one key secondary endpoint, if you remember, which was a PSP, which is looking to everyday functioning of the patients. And there we had a P value, which was highly significant of 0.016. So clearly when you are looking to do these patients improve, clearly they're improving in a significant way with a good p-value in the phase 2b and in the phase 3. So clearly, I mean, this is, you know, what are the issues. I don't know if I answered your question.
spk05: Yes, it's very clear, and thanks. And so now it sounds like you're going to talk to them over the coming months about the NDA and so forth. And any thoughts on the timing of the resolution or an outcome of this? Is it also going to be another Type A meeting? Or I don't even know how you classify it. But any clarity around the potential timing of that outcome here?
spk02: So I think we cannot be clear about the timing. I mean, the dialogue is ongoing, and we hope, obviously, to have the shortest timeline. But as we mentioned, I mean, this will happen over the next coming few months or few weeks, let me put it like this, basically. But I think, if you allow me an additional comment, you know, what we are trying to really bring over as a message, and I think it's a completely... fair message is that, you know, we have a lot, a lot of information in our NDA. For example, what I was mentioning just before, you know, about comparability between U.S. and non-U.S. patients. So we have a lot of information about the functional improvement of the patients, because if you remember, PSP, the key primary we had in the phase three was the total score of PSP. But I mean, you have four subscores. And we have analyzed the four sub-scores in details, which again confirms that the drug is improving functioning in patients. So what we are trying to really bring over as a message to the FDA is that the reasons, I mean, as I gave you before, are not reasons of a rich use of the file, but are topics which, first of all, need an in-depth review, an in-depth analysis of our FDA, a dialogue with a sponsor, to really go into the details of all the data we have to show that Roliparidone is an effective drug for patients suffering from negative symptoms and having a diagnostic of schizophrenia. So this is the dialogue ongoing, and in terms of timing, unfortunately, I cannot give you more details.
spk05: That makes sense, makes sense. And very last question, to the extent you can share, who at the FDA has been overseeing the NDA application? Just curious if it was Billy Dunn, and if so, does his departure change your calculus on anything as it pertains to the NDA? Thanks.
spk02: That's a great question as well. So clearly, I mean, as you know, when you're submitting your NDA and those are type C or type A meetings are mostly with the psychiatry division. That's because, I mean, the decision for a refusal to file is coming from the division. So, I mean, basically, for clearly, I mean, the main dialogue has been with the psychotic division. This said, indeed, Dr. Dan was also involved, obviously, because he was a person overlooking the psychotic division and the other divisions of the neuroscience, neuroscience divisions, you know, neurology one, two, three, yes, but... So, yes, indeed, I mean, I think what I can say is that Dr. Dan is known to be a person who is really open to, you know, to developments or to indications with no approved treatment. And also what is very important is that Dr. Dan is very keen to not only have a p-value, but to see a function of improvement, which we have with Roliparidone. So clearly, I mean, I don't think that, I mean, it will be a problem for us that Dr. Dunn left, but it's clear that he understood that functional improvement is important. So I'm confident that the other people still at the FDA will understand. And I think the person who has been nominated in the place of Dr. Dunn is also a person who is very, how to say, knowledgeable and open to to innovation. So not a problem, but I think the people still in place will continue to work along the lines that Dr. Dunn has proposed in the past.
spk05: Very good. Thanks so much, Remy, for all the updates. Best of luck. You're welcome.
spk04: Thank you. One moment for our next question. Our next question comes from the line of Douglas Thao with HC Wainwright. Your line is now open.
spk06: Hi, Remy. Good morning. So, just as a follow-up, obviously, there's still some uncertainty, but when you envision the path forward for Roloperidone and your interactions with the agency, do you think that one study would potentially be sufficient to address their concerns? or would you need to potentially run both a monotherapy as well as an adjunctive therapy study? Or could that potentially be, you know, carried out in one trial? Thank you.
spk02: Well, like always, a great question, Esamin. To be very clear, the FDA never asked us to run an additional study. What they asked us, as I already discussed with you, is that they wanted us to continue to feed them with additional information. As we speak, this is exactly what we are doing. Your comment about monotherapy and add-on is an interesting one. Clearly, We developed Rhodoperidone in monotherapy for several reasons. The first reason is to demonstrate that we have a specific improvement of negative symptoms because monotherapy versus placebo is the only way to do it. You cannot do it if you put, for example, an antipsychotic on board because you don't know exactly what is going on here in order to claim that you have a specific effect. And second, I mean, you will unblind the study immediately because, I mean, you have the side effects of antipsychotics. So this was one of the reasons. The second reason is very important, I think, for patients at the end of the day is that the scientific community and the medical community is now more and more saying that, I mean, all the patients with a diagnostic of schizophrenia should not be treated continuously with antipsychotics. And even more importantly, I mean, there are no data coming out really showing that there is a significant part of the patients with a diagnostic of schizophrenia who do not need continuous treatment with antipsychotics. So this is exactly, I mean, the patient population we have targeted, remember, We targeted patients where they needed to have a minimum score of negative symptoms on the PANS just to show the impairment is there. This had to be stable over the last six months and that they needed to have stable positive symptoms. And when you're looking to other data, what you see that, yes, we have this improvement of negative symptoms of PSP. But I mean, these patients stay extremely stable on positive symptoms and at an extremely low level. Yes, I mean, they are at 14 points when they enter the study and they are at 14 points when they go out of the study. And as you know, the minimum score, if you have no symptoms, if you have no positive symptoms, is seven points. So these patients are completely stable in terms of positive symptoms and the Remember, as well, I presented also the relapse rate. And the relapse rate we have there is very low, I mean, around 12% over a period of one year, which is below what you see in the possible randomized withdrawal studies with adipose psychotics. So clearly, I think we have demonstrated that, I mean, at minimum, the patient population we have included does not need continuous treatment with antipsychotics. So I cannot go into the details because we never disclosed it, but we have provided also evidence to the FDA that if a patient really needs antipsychotics, he is responding extremely well to antipsychotics. So long story short, to your question about the study, an additional study monotherapy or a study where we are combining monotherapy plus, you know, a combination with antipsychotics. Obviously, we have worked on this. We have thought about it since the beginning of the development of roniparidone. But I think these are really questions you are asking yourself or you are doing after, I mean, you have a complete in-depth review by the FDA of our NDA. And this is usually what the companies have to do, you know, post-approval. So here we obviously, as Minerva, completely open for post-approval trials. And last but not least, just, I mean, when you're looking to what we are proposing as labeling, clearly, I mean, the labeling is monotherapy for the specific patient population we targeted in our trials. And what we are proposing here, and again, we have data, and we have shown this data to the FDA, that if, I mean, a patient has a relapse and needs an antipsychotic, the antipsychotic is doing the job, yes, basically. So again, long story here, but this is the logic. So all what is needed in order to better characterize add-on and all these kind of things, I think, is post-approval work. because we have two well-controlled and well-adequated studies, and this is normally the basis of an NDA review.
spk06: So, Remy, I hear your point, but I guess I'm just wondering, and I ask you, I mean, does there come a point where sort of pragmatism needs to rule just because While, yes, there may be a path forward with the existing data set, clearly the agency has expressed reservations. And if you, you know, so from an efficiency standpoint, just carrying out another study might just be the most efficient way to go, you know, even to some extent maybe financially at this point. I mean, if we step back and think about when we had the first result from that phase three, if you had pivoted to run a follow-up study, that study would have probably read out by now. And then you would be able to go back to the agency or go to the agency with an incontrovertible, you know, data set, nothing for them to really question. So, I mean, I guess, you know, I don't know if that's – so I guess at what point do you feel, you know, you've exhausted those options?
spk02: So clearly, I mean, you know, I hear you very well. And I mean, you're not the only one telling us just go on and run another study. But which kind of study do you run? You started by saying, okay, monotherapy, add-on, you know, so the question here, and that's the reason why we try really to get complete clarity. Again, don't... Understand something wrong. I mean, I'm convinced that the package we have is enough. Yes, I mean better If I mean we think about an additional study we need complete clarity about the study we need to complete blessing from the FDA about the study because You know, there are some precedents where companies have run a study Thinking that they are doing the right thing and basically when they came back with a positive study this one of the studies they had to carry out that so I or the FDA did not completely agree to this. So we are looking to really get the complete clarity, and I think it's this what is driving us. But again, I think we have the package needed for the FDA jumping in and reviewing our engine.
spk06: But, Remy, just to clarify that final point, just to make sure so everybody can understand, because I think it is very important. So as part of your current interactions with the agency, part of that discussion is to get clarity from them on what potential additional studies may be needed?
spk02: The answer is no, yeah.
spk06: What we are clarifying is... So you're still simply pursuing trying to get the existing data set approved?
spk02: Exactly. So, I mean, we are not discussing about an additional study. We have opened the door since long to do post-approval studies. But, I mean, what we are trying to understand is, you know, what they need as additional analysis in our data set we have currently. And what we are also, you know, discussing is that, you know, if you go according to the guidance of refusable files, the reasons I mentioned at the beginning of this call are not part of a refusable file. So what we are trying to understand is what ZFJ needs with our data package in order to, how to say, start the review. And I think more we are advancing, more it becomes clear that indeed, I mean, we have the data needed. So give us a little bit of time, and we will give you the update on what is the outcome of this, I think, constructive discussions going on currently.
spk03: Thank you. Again, ladies and gentlemen, that's star 1-1 to ask your question. I'm showing no further questions at this time.
spk04: I'd like to hand the conference back over to Dr. Luthringer for closing remarks.
spk02: Yes, thank you so much, and really thank you, Andrew, and and look for these important questions. I hope it really clarifies that, you know, we really have a very, very important dialogue still going on that we will get clarity very soon about, you know, what are the next steps. But, I mean, I think, as I tried to explain, we have really a very important data package which leads to an in-depth review by the FDA, and we're confident that this will happen. And if this review starts, I think everybody will understand that Brodyperidone is really an important drug to address the huge and magnetic need with no approved treatment in the U.S. So we're really looking forward to really update you as soon as we have more clarity about the dialogue going on currently with the FDA. Thank you so much for your room. for being with us today.
spk04: Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
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