Minerva Neurosciences, Inc. (NASDAQ:NERV) Q2 2019 Results Earnings Conference Call August 5, 2019 8:30 AM ET
William Boni - Vice President of Investor Relations and Corporate Communications
Remy Luthringer - Chief Executive Officer
Richard Russell - President
Geoff Race - Executive Vice President, Chief Financial Officer and Chief Business Officer
Conference Call Participants
Joel Beatty - Citi
Douglas Tsao - H.C. Wainwright
Jason Butler - JMP Securities
Biren Amin - Jefferies
Welcome to the Minerva Neurosciences Second 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 Investor Relations 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.
Good morning. A press release with the company's second quarter 2019 financial results became available at 7:30 a.m. Eastern Time today, and can be found on the Investors section of our website. Our quarterly report on Form 10-Q was also filed electronically with the Securities and Exchange Commission this morning and can be found on the SEC'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 June 30, 2019 filed with the SEC on August 5, 2019.
Any forward-looking statements made on this call speak only as of today's date, Monday, August 5, 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.
Thank you, Bill, and good morning, everyone. Thanks for joining us today. The first half of 2019 has been very productive for Minerva. We announced positive top line results in two Phase 2b trials with seltorexant, Orexin-2 antagonist currently in development for two indications, major depressive disorder, MDD and insomnia.
I am pleased to report that we have just obtained top line results in our first study with seltorexant. This biomarker study designated us MDD1009 was carried out in parallel with a Phase 2b trial. So top line results show improvements in symptoms of depression in MDD patients when seltorexant is given as a monotherapy. I will provide further information on these results later in the call.
We have also made good progress in the enrollment of patients into our three additional late-stage clinical trials. These include the ongoing pivotal Phase 3 trial with roluperidone, a further Phase 2 trial with seltorexant for which recruitment has been completed and the Phase 2b trial with MIN-117.
As you know, our mission at Minerva is to develop drugs to address unmet medical needs in patients living with serious neuropsychiatric disorders. In our lead program roluperidone we have demonstrated in the Phase 2b trial that the drug even in monotherapy showed specific improvement of negative symptoms in patients suffering from schizophrenia. To the best of our knowledge, this remains the first time such a specific effect has been shown.
The recent seltorexant data also for the first time in duration class demonstrates efficacy in both adjunctive and monotherapy treatment of MDD. So let me today start with seltorexant, as we have announced significant data with this molecule over the last quarter. Seltorexant is a selective Orexin-2 receptor antagonist that we are co-developing with Janssen Pharmaceutica NV. To the best of our knowledge, seltorexant is the only late-state specific orexin-2 antagonist in development. All other clinical stage molecules, orexin-1 and 2 antagonists.
The orexin system in the brain is extremely important and involved in the control of several key functions. These include regulation of certain metabolic functions, brain function modifications linked to abnormal stress levels, and/or hyper-arousal, and sleep-wake rhythm dysregulation, which may lead to sleep disorders like insomnia.
As I mentioned earlier, we conducted a biomarker study known us MDD1009, study in 128 patients with moderate-to-severe MDD. This multi-sensor, placebo-controlled, randomized double-blind study saw two dosing of seltorexant, 20 mg and 40 mg where given as monotherapy and not as an add-on treatment to SSRIs and/or as SNRIs, as in the recent MDD2001 study. Monotherapy rather than adjunctive treatment was chosen for this study to evaluate the mechanism of action of seltorexant alone and to avoid the variable effects of antidepressant drugs.
The primary objective of this study was to analyze the treatment effect of seltorexant versus placebo on symptoms of depression as measured by the Hamilton Rating Scale for Depression 17, HDRS17, the presence of subjective sleep disturbance, subjective sleep assessment, Insomnia Severity Index, ISI and Ruminative Response Scale, RRS, as a possible indicator of hyper-arousal was used as a stratification factor in patient randomization.
I am pleased to announce that the primarily endpoint analysis showed a significant positive treatment effect at week-5 for seltorexant versus placebo. The efficacy signal for the 20 mg dose was statistically significant p=0.0049 and even more pronounced in the MDD population with sleep disorder, measured as having an ISI superior to 15 and subjective sleep onset latency superior to 30 minutes during at least 3 nights over 7 days and in MDD patients with higher rumination measured has having a Ruminative Response Scale or RRS superior or equal to 50.
While the seltorexant 40 mg dose did not show a statistically significant effect at week-5, MDD symptoms improved and the efficacy significant was also more pronounced in MDD patients with presence of subjective sleep disorder measured as having an ISI superior to 15.
These new findings from the MDD1009 study showed that seltorexant as monotherapy improved their positive symptoms and that the improvement is more pronounced when patients also have insomnia. Importantly, they also support the relationship between hyper-arousal, clinical efficacy and the mechanism of action of seltorexant.
On May 12, 2019 we announced positive top line results from the MDD 2001 trial, the Phase 2b trial of seltorexant as adjunctive therapy to antidepressant in other patients diagnosed with major depressive disorders and not adequately responding to serotonin reuptake inhibitors (SSRIs) and/or serotonin-norepinephrine reuptake inhibitors (SNRIs).
In this dose finding study, the 20 mg dose of seltorexant showed a statistically significant improvement in the Montgomery-Asberg Depression Rating Scale (MADRS) score compared to placebo at 6 weeks. Seltorexant was also observed to have even greater improvement over placebo in patients with clinically significant insomnia and a favorable tolerability profile. Additional analysis of the data are ongoing and complete details are planned for presentation during the next ACNP Annual Meeting in December of this year.
Let me now move to our recent insomnia results from study ISM2005 recently presented in a press release and discussed during a KOL call on June 24, 2019. This study which was conducted in other elderly patients with insomnia, explored the effects of 5mg, 10 mg, and 20 mg of seltorexant. It was placebo controlled and including an active arm of zolpidem, also known as Ambien.
Positive top line results from this study demonstrated highly statistically significant and clinically meaningful improvement in the primary endpoint, Latency to Persistent Sleep (NYSE:LPS) at Night 1 after treatment with 10 mg and 20 mg doses of seltorexant. In addition to the primary endpoint, multiple secondary endpoints were improved with seltorexant versus placebo and standard of care zolpidem.
Furthermore, the beneficial effects of seltorexant in elderly patients, in conjunction with a favorable tolerability profile, suggests its potential benefit in the large and growing population of elderly patients whose prevalence of sleep disorders including insomnia is higher than in younger patients.
To summarize, the data announced this past quarter demonstrated seltorexant is able to improve the depressive symptoms in MDD patients, not responding adequately to first-line therapies as well as in MDD patients treated with monotherapy. The observed mood improvements in these patients are more pronounced when associated with insomnia. In addition, improvement in insomnia when observed in patients with associated neuropsychiatric comorbidities and these improvements where superior to those observed after treatment with zolpidem and present in adults and in the elderly.
Importantly, these therapeutic effects were observed without major side effects as the safety and tolerability profile of seltorexant is comparable to that of placebo. Taken together, the findings from the three trials conducted to date, confirms unique ability of seltorexant to address unmet medical needs in both mood and insomnia disorders.
Let me now provide an update on roluperidone, our most advanced program in a pivotal Phase 3 trial. We are continuing to recruit patients in this trial with diagnosis of schizophrenia who present with negative symptoms. This trial will enroll approximately 500 patients at approximately 60 clinical sites in the U.S. and Europe. The design of the Phase 3 trial is fundamentally consistent with that of our successful Phase 2b trial.
We are seeking to replicate the statistically significant improvements in negative symptoms observed in the Phase 2b as measured by the PANSS scale, which constitutes our primary endpoints. Furthermore, we are assessing two secondary endpoints which are PSP, Personal and Social Performance scale, total scores and the CGI severity scale. The reason for selecting these two secondary endpoints is to demonstrate that an improvement in negative symptoms translates into functional improvements in patients treated with roluperidone.
With respect to the effects observed on the PSP scale in our Phase 2b study, I am pleased to report that the scientific publication has been accepted recently in the Schizophrenia Research Journal about this ill which is one of the best ways to show that the improvement in negative symptoms translates into a functional improvement in patients treated with roluperidone.
Concerning the Phase 3 study, our main focus is on the close monitoring of sites in Europe and in the U.S. to ensure adherence to key parameters of this trial. This includes careful patient selection and objective assessment of patient's symptoms during the treatment phase. We expect to readout data from the 12-week double blind treatment period of the Phase 3 trial in the first quarter of 2019.
In parallel we are also moving forward with considerable preparatory work for the filing of a New Drug Application, NDA for roluperidone pending a positive Phase 3 study. We recently have completed a clinical pharmacology trial focused on drug-drug interaction, DDI studies which comprise a standard part of the NDA. Without going into too many details, these include interactions with molecules separately inhibiting two sub types of the Cytochrome P450, CYP2D6 and CYP3A4. The data from this study are currently being analyzed and preliminary data show minimal interaction. Our commercial team also continue to work on the positioning and launch strategy of roluperidone.
Moving on to our last clinical stage product, we are continuing to recruit patients in our Phase 2b trial with MIN-117. Patients recruited in this trial have a diagnosis of MDD associated with anxiety. Based on our previous clinical findings we believe that these patients may benefit particularly from treatment with MIN-117. Approximately 324 patients are expected to be enrolled in this trial and about 40 sites in the U.S. and Europe. The study design includes a screening phase, a six-week double-blind treatment phase, and a two-week post study followup period. Top line results are expected in the fourth quarter of 2019.
In summary, the first half of 2019 has been tremendously exciting with really important clinical readouts for seltorexant that demonstrate the potential of this molecule to treat multiple groups of patients in the therapeutic areas of MDD and insomnia. We look forward to the second half of the year which will provide important results for our two late-stage clinical molecules, roluperidone and MIN-117.
I will now turn it over to Geoff, who will describe our financials in greater detail.
Thank you, Remy. Earlier this morning we issued a press release summarizing our operating results for the second quarter ended June 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 the June 30, 2019 were approximately $69.4 million. The company believes that its 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 early 2021 based on our current operating plan. The assumptions upon which this estimate is based are routinely evaluated and may be subject to change.
Research and Development expenses were $8.3 million in the second quarter of 2019 compared to $9.1 million in the second quarter of 2018, a decrease of $0.8 million. This decrease primarily reflects, decreased nonclinical and clinical pharmacology expenses partially offset by increased costs in the Phase 3 clinical trial of roluperidone and the Phase 2b clinical trial of MIN-117.
For the six months ended June 30, 2019, R&D expenses were $19.9 million compared to $17.5 million for the six months ended June 30, 2018, an increase of $2.4 million. This increase primarily reflects higher development expenses for the Phase 3clinical trial of roluperidone and the Phase 2b clinical trial of MIN-117. We expect R&D expenses to increase during 2019 as we increase patient enrollment and related support activities for the roluperidone and MIN-117 clinical trials. General and administrative expenses were $4.6 million in the second quarter of 2019 compared to $3.9 million in the second quarter of 2018, an increase of approximately $0.7 million.
For the six months ended June 30, 2019 G&A expenses were $9.3 million dollars compared to $8.2 million for the same period in 2018, an increase of approximately $1.1 million. These increases in G&A expenses were primarily due to an increase in non-cash stock-based compensation expenses and salary costs from increased staffing to support our pre-commercial activities. We expect G&A expenses to increase during 2019 as we prepare for the transition of roluperidone from clinical development to commercialization.
Net loss was $12.5 million for the second quarter of 2019 or a loss per share of $0.32 basic and diluted, as compared to a net loss of $12.5 million or a loss per share of $0.32 basic and diluted for the second quarter of 2018. Net loss was $28.3 million for the first six months of 2019 or a loss per share of $0.73 basic and diluted as compared to a net loss of $24.9 million or a loss per share of $0.64 basic and diluted for the first six months of 2018.
Now I’d like to turn the call back to the operator for any questions.
Thank you. [Operator Instructions] And our first question comes from Joel Beatty with Citi. Your line is open.
Hi, thanks for taking the questions. The first one is on seltorexant, and the Phase 2 results coming this quarter and obviously we’ve already seen data from a couple trials there. So, how could the Phase 2 results coming affect the overall picture of where seltorexant program is at and then the decision making process of on how to go ahead with that program?
Hello, Joel, I am Remy speaking. So I think, you know, as I always explained, and I think I explained this during the last earnings call, we had, I mean it was the last study we are reading out and I assume is a study which is a comparison over a period of six months between our molecule and quetiapine which is the standard of care to treat patients who are not responding adequately to SSRIs or as SNRIs.
So this is really, I mean, mostly a study which is a study to really better understand how the things are comparing between standard of care and our molecule, obviously in terms of safety, because as you know quetiapine is an antipsychotic and has always the side effects of antipsychotics and really also to have some long-term data with our molecule.
So I think it will not change as a basic plan of the Phase 3 or the registrational [ph] studies will be the same, but I mean, having in addition the data from this 2002 study coming, it will help us to really fine tune the plan in order to really demonstrate the added value of our molecule compared to standard of care. So, again, important study, but it does not change, you know, where we are going, yes.
Okay, got it. And a question about the Phase 3 roluperidone program and the mix of patients between Europe and the U.S., I guess, you know, first of all is - can you give us a sense of the range of the breakdown of how it might fall into, is it going to be exactly 30% of patients in the U.S. or is there some wriggle room there? And then the second part of the question is, are you able to give a sense of - just based on the blinded data how patients compare in the U.S. and Europe in this trial?
So, as you know I mean, what we have discussed with the FDA at the end of Phase 2 meeting is to do our best efforts to come as close as possible to 30% of the patients coming from the U.S. As of today the things are quite in line with these numbers, but I mean it’s obviously not 30% exactly, but I mean it is very well in line, yes.
Now, concerning your second question, yes indeed, I mean, as you know I’m a big fan of checking the quality of the data, comparing the data from country to country, from site to site and because the U.S. is - if you want - the only difference between the Phase 2b and the Phase 3, because in the Phase 2b we only had European sites, I’m obviously carefully following what is going on in the U.S. and I have to say that I am really very reassured about the results, because when we are analyzing our data, obviously completely blinded, so I don’t know what is going on between placebo and treatment, but completely blinded, the U.S. is performing as well as Europe.
And I think, you know, I was always concerned about the way these patients are recorded in the U.S. because we are dealing here with negative symptoms, you need to check the stability of the negative symptoms over a certain period of time before including the patients. But once the patients are in the study, I think in the U.S. as the sites are doing a great job in assessing the symptoms of the patient. So, again I mean, we have more screen fails, so less patients who are included into study, but once the patients are in the study I think we cannot see any difference between U.S. and Europe which is extremely reassuring for the outcome of the study.
Great, and then maybe one last question. If the Phase 3 results are successful could you discuss maybe the timeline for filing and any other stuff that need to be taken in order to prepare the NDA filing?
So, obviously the, - we are working - as I mentioned we are working really hard on the NDA preparation. As you have seen also we have now completed the DDI studies. We discussed with the NDA at the end of Phase 2 meeting, so I think we are really ready based on the positive data of the Phase 3 to really start to discuss with the FDA. So really I think what we have announced before will be respected because we really ready with all the different modules of the NDA.
Obviously we need to have the results of the Phase 3, so double-blind phase and afterwards as you know, we are doing what we are proposing to the patient an extension of nine months in order to have 12 months safety data. This will come in on a rolling basis, but definitely we are completely on time for the NDA filing.
Great, thank you.
Thank you, Joel.
Thank you. And our next question comes with Douglas Tsao with H.C. Wainwright. Your line is open.
Hi, good morning. Thanks for taking the question. Just -- you know, Remy, just going back to the MDD1009 study for seltorexant, just as follow-up, I mean I guess, how does this affect your thinking or sort of inform you when you think about moving ahead with that molecule into clinical [ph] trials? We obviously already knew about the effects of an antidepressant as well you touched on sleep, and so I'm just curious from your perspective what was the big key takeaway?
So, great-great question obviously, and I think the good problem we have here is that we have no another options here, because this is really a very nice demonstration that I mean the drug has a direct effect on mood. Yes, I mean, it's really confirming what we have seen before. But, I mean, this is the first time we are doing a study in monotherapy.
And so, I think it does not really change our view, yes, because what it confirms and we are continuing to work on analyzing additional data coming out from this data -- from this study, excuse me, because we are looking to cortisol, we are looking to some aspects, which are you know, able to detect arousals, which are able to detect stress and we will learn more about some mechanism of action.
But basically with all the data we have today are confirming, you take the add-on data in depression, you take this monotherapy data in depression, you take our data in insomnia, are showing that this is a very innovative mechanism of action. And I'm really insisting on this, because if you compare this to dual antagonist, this is not a dual, it's the same profile. And interestingly enough, I mean, in our case, we cannot discriminate in terms of side effects from placebo. So we have a very-very good safety profile.
So I think it is just confirming what we were thinking, how the drug is working. And it gives us even more confidence, in fact what we are doing moving forward in Phase 3 will be successful, yes. But it does not change anything in terms of thinking, in terms of development plan.
Okay. And so it is just to sort of some -- not to put words in your mouth, so in some ways one of the big values is the monotherapy is that it removes any sort of confounding factor of the adjunctive therapies that were being given in some of the previous trials?
Exactly. You're completely right.
And does that gives you incremental sort of thought to using it as a - testing it as a monotherapy or do you continue to think, at least in depression it would be more than as a common - you know, as an adjunctive therapy?
So as of today, I mean, we have not completely finalized our Phase 3 development program with our colleagues from Johnson & Johnson. Because as you know for the depression indication, this is something we are doing in complete transparency and discussion with our colleagues from Johnson & Johnson.
I don't think that it will change our way to see the future into Phase 3, which will be probably add-on to existing therapies. But again, don't take it as completely granted, because I mean, the discussions are still going on. But today, I think it's just confirming that here we are dealing with a drug which is not only doing something on insomnia, but is really having a direct effect on depression, which is definitely very reassuring. But I think it will not change the picture moving forward.
Okay, great. Thank you so much, Remy.
You are welcome.
Thank you. [Operator Instructions] We have a question from Jason Butler with JMP Securities. Your line is open.
Hi, thanks for taking the questions. Just another one on the new data from the 1009 study. Can you just, Remy, maybe speak to how these new results impact your views on advancing the 40 mg dose, as well as the 20 mg dose into the next stages of development?
Jason, I was expecting this question, great question. So, clearly, I mean, 20 mg is crystal clear, so as you have seen, we have exactly the same results in monotherapy as the results we have seen in add-on. So 20 mg is and will remain as the cornerstone dose. We are still working on better understanding what is going on with 40 mg. A lot of work is currently on going. We're trying to understand how the free fraction of the drug is impacting the results.
So we are really working very hard on this 40 mg data. In other words, I mean to be more precise, we are already working on checking if there is a dose dependent or an exposure dependent effect on mood and things are still ongoing. And I think based on this data, which will probably be available very soon, and we will sit together with our colleagues from Johnson & Johnson, we will decide if the Phase 3 will be - is one dose or with two doses, including 40 mg.
So stay a little bit with us and I think during the next quarter I can give you complete clarity of where we are going. But again, 20 mg is definitely confirmed to be the cornerstone dose. And as you have seen, also for insomnia, 20 mg is an important dose. This side, you have also seen that with 10 mg we have a very-very nice effect on insomnia. So obviously with insomnia we are also contemplating lower doses than 20 mg. But again, stay with us for two or more weeks and I will give you the complete clarity on where we are going.
Great, very helpful. Thanks for taking the question.
Thank you. Our next question comes from Biren Amin with Jefferies. Your line is open.
Hi, guys. Thanks for taking my questions. Remy, on roluperidone Phase 3 trial; can you just talk about the read-throughs from the recent Acadia study that has failed?
Yes. So thank you for the question. I think it's very complicated to draw some conclusions from the Acadia study. Because as you have seen, I mean, the Acadia study is a study where the drug has been given on top of antipsychotics for -- in patients who are not responding well to antipsychotics. The score of these patients entering the study was quite high on the PANSS scale and so the study design is completely different for obviously what we are doing. And this study was not stratified, for example, in terms of negative symptoms.
I know that there is another study coming soon from our colleagues from Acadia where the minimum score of negative symptoms, but again, it will be add-on to antipsychotics. So, I mean, long story short, I think we cannot – I have to say, draw any conclusions from the study concerning our trial, yes. Obviously there is something in common, which is the 5-HT2A antagonism or inverse agonist, which by the way is getting the same pharmacological effect.
What it means is that the 5-HT2A component is definitely contributing to help in terms of controlling positive symptoms. It might also have small beneficial effect for example, on cognition. It has definitely an effect on sleep. So clearly, I mean, what this data tell me is that 5-HT2A is important, but not enough in order to really move the needle in terms of negative symptoms and cognition and I mean, when you look into our drug, it is very-very clear that, I mean, the effect is driven by the synergistic or the combination of 5-HT2A antagonism and Sigma2 antagonism. So, again, interesting, important data, but we cannot really conclude based – or to expand to our data.
And then maybe just some follow-up questions on seltorexant, the 1009 trial; can you just talk about if you saw treatment effect difference with the 20 mg dose before week-5? You know, so I guess the question is, how quick was the onset of effect?
So it is definitely following the same time course as what we have seen in the add-on study. Yes, so definitely you'll start to see a differentiation between placebo and treatment after two weeks, because this was the way - the first time we measured really. And the things are building over time. So technically, exactly the same time course as what we have seen in add-on study.
So this is what you can have as you have as a take home message from this data, which by the way is, again, very-very-very reassuring, because I'm always intrigued, if I mean one study shows some things, the other one shows something different. Here in this case, I mean, the time course of the effect on mood is exactly the same.
And then on the 2002 trial that's ongoing where you're expecting that data in Q3; are you evaluating both the 20 mg and the 40 mg doses?
Yes, in fact it's a great question. It's a flexible dose study. So basically, it gives a possibility because as you know quetiapine is also when you prescribe quetiapine for patients who are not responding well to existing antidepressant, you'll give the flexibility to the prescriber to have different doses and to adapt the dose.
So what we have done in this study in order to be very similar or comparable to standard of care, we give the possibility to the PI's or to the sites to have an opportunity to give 20 mg or 40 mg. So technically they have the possibility to decide about the dose. This is a flexible dose study. So clearly we have 20 mg and 40 mg. We will obviously analyze also the study or the patients who have received 20 mg compared to 40 mg in order to continue to check what is going on between the two doses. But definitely this is a flexible dose study.
Great, thank you.
Thank you so much.
Thank you. And I'm showing no further questions at this time. I'd like to turn the call back to Mr. Remy Luthringer, for any further remarks.
So, really thank you for all these questions, and thank you for everybody attending this call and I'm really looking forward to updating you on our progress in the near future, because second half of this year will be also very important year – second half of the year like it has been since the beginning of the year. So we'd be looking forward to speak with you again soon.
Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect. Every one, have a great day.