Minerva Neurosciences, Inc. (NERV) Q1 2016 Earnings Report, Transcript and Summary

Welcome to the Minerva Neurosciences First Quarter 2016 Conference Call. [Operator Instructions] 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 William Boni, Vice President of Investor Relations and Corporate Communications at Minerva. Please proceed.

Good morning. A press release with the company's first quarter 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 Internet website at www.sec.gov. Joining me on the call today from Minerva are Dr. Remy Luthringer, President and Chief Executive Officer; and Mr. Geoff Race, Executive Vice President, Chief Financial Officer and Chief Business Officer. Following our prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind you that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and 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 including without limitation whether any of our therapeutic products will advance further in the clinical trials process; whether, when, and to what extent results from such trials will be available, and whether and when if at all such products will receive final approval from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies, and for which indications whether any of our therapeutic products will be successfully marketed if approved; whether any of our therapeutic product discovery and development efforts will be successful; our ability to achieve the results contemplated by our co-development agreements; management's ability to successfully achieve its goals; our ability to raise additional capital to fund our operations on terms acceptable to us; the sufficiency of our current cash position to fund our operations and general economic conditions. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption 'Risk Factors' in our filings with the SEC, including our Annual Report on Form 10-Q for the quarter ended March 31, 2016, filed with the Securities and Exchange Commission on May 3, 2016 Any forward-looking statements made on this call speak only as of today's date, Tuesday, May 3, 2016 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. During the first quarter of 2016, we reported [indiscernible] top line data from two trials with MIN 202, our selective orexin 2 antagonist, and the co-development with Janssen Pharmaceutica. This included a Phase 2a trial in patients suffering from primary insomnia disorder and the Phase 1b trial in patients having the diagnosis of major depressive disorder or MDD. We also recently reported the last patient visits in two additional trials including the Phase 2b trial in schizophrenia with MIN-101 and the Phase 2a trial in major depressive disorders with MIN-117. Those results from both studies are expected later in the second quarter of this year. In all of our clinical programs, our primary goal is to address significant unmet needs in the treatment of large patient populations affected by this diseases. Let me know address those trials in more detail beginning with MIN-101. A total of 244 patients have been enrolled in our randomized placebo-controlled double blind pilot group design Phase 2b clinical trial to treat unmet needs in patients suffering from schizophrenia. The primary objective of the trial is to evaluate two doses of MIN-101, 32 and 64 milligrams administered, one daily in the morning compared to placebo in improving negative symptoms in these patients as measured by the chance from baseline in the positive and negative syndrome scale. Negative subscale score of the pentagon model of 12-weeks of treatment. Important secondary objectives include assessments of the effect of MIN-101 on the total pan score and sub scores, as well as its effect on cognition and sleep. The course study which is a double-blind treatment period of the trial was carried out over 12-weeks, thereafter; patients had the opportunity to enter into an extension period lasting six months. During the extension, all patients received either 32 or 64 milligrams of MIN-101. Patients who received placebo in the core study will be randomized to one of these two doses. This expansion phase is ongoing and expected to be completed during the third quarter of 2016. Program [ph] results from the core study period of the trial are expected in the second quarter of 2016. These results will provide the foundation for our strategy about the next step in moving MIN-101 into late-stage development. I would like to summarize the results of the trials with MIN-202 announced during the first quarter. On January 11, we announced positive top line results from a Phase 2a clinical trial in 28 patients suffering from insomnia disorder, not associated with psychotic disorder. In this double-blind crossover placebo controlled trial, 40 milligram of MIN-202 was tested over a treatment duration of five consecutive nights. The data obtained by means of polysomnography PSG recordings, an objective measure of sleep indicate that MIN-202 significantly improves sleep induction, restore sleep duration and preserves key phases of sleep, particularly deep sleep, thus enabling a restorative sleep. The primary endpoint of the trial was clip efficiency, for which a positive efficacy signal was detected after treatment with MIN-202 versus placebo, pretty inferior to 0.001. Additional statistically significance P in favor to 0.001 positive efficacy signals were observed for key secondary parameters including latency to present sleep, LPS, wake up to sleep onset, while -- and total sleep time, TST. Compared to placebo, MIN-202 was observed to significantly improve polysomnography parameters; P inferior to 0.001 on days one and five. Interestingly and very importantly, significant correlation was observed between objective and subjective evaluations. The second study with MIN-202 was carried out in patients suffering from major depressive disorders, MDD. In Phase 1b randomized, multi-standard double-blind pilot group de [ph] and placebo-controlled study evaluated the effect of MIN-202 in MDD outpatients, 18 to 65 years of age. 48 patients were enrolled in three treatment arms to receive doses of 20 milligrams of MIN-202 daily; 25 milligrams of different inter-MIN daily used as a positive control to induce sedation or placebo over four weeks. The primary endpoint was safety and tolerability and secondary endpoints including assessments of depressive symptomatology, cognition and sleep. MIN-202 was observed to be well perorated by study participants over a one month treatment duration with no new observed emerging safety signals and serious adverse events. Consistently greater improvements in depressive symptomatology were observed in patients randomized to receive MIN-202 compared to dose randomized to receive placebo or inter-MIN as measured by clinician administered rating scales including the Hamilton Depression Rating Scale. HDRS17. Core symptoms of depression as measured by HMDD6 but observed to be significantly improved in the MIN-202 ARM when compared with placebo. This improvement supports the potential of MIN-202 to have a direct effect on mood [indiscernible] from its effect on sleep and paves the way to initiate a Phase 2b trial in patients suffering from MDD. Data from a serve trial with MIN-202 became available earlier in the year as well. In the Phase 1 trial single dose morning administration of MIN-202 was observed to be well tolerated in healthy Japanese other male participants. We observed plasma pharmacokinetic features were comparable to those observed in previous studies carried out in healthy non-agent study participants. The positive data from this trial points as a way towards first clinical development in several indications with unmet needs. We are currently working with Janssen to define the specific next steps in this program. Our observed clinical stage compound is MIN-117 in development to treat MDD. A total of 84 patients with MDD have been unfold in a Phase 2a randomized double-blind parallel group placebo and active-controlled clinical trials with MIN-117 in Europe. These patients were enrolled across the four treatment arms of the study which included all 4.5 and 2.5 milligram daily of MIN-117, 20 milligram daily of paroxetine and placebo. The primary objective of this trial is to evaluate the efficacy of MIN-117 given at 4.5 milligram and 2.5 milligram daily in reducing the symptoms of a major depressive episode as measured by the chance from baseline in the Montgomery-Asberg Depression Rating Scale, MADRS, total score over six weeks of treatment. Additional objectives include the assessment of onset to response, severity of illness, sexual function, executive function, working memory and safety and tolerability. Top line results from this trial are expected in the second quarter of 2016. In summary, thus far this year we have announced positive results from two clinical trials with MIN-202 that provide us solid basis for moving forward into more advanced clinical testing in two important indications; insomnia disorder and mood disorders. Consistent with our previous guidance, our trials with MIN-101 and schizophrenia and with MIN-117 MDD are on-track to read out later in the second quarter of 2016. We look forward to reporting this data in the not-too distant future and determining the next steps in the clinical development of these products based on our findings. I will now turn the call over to Geoff to cover our financial reserves.

Thank you, Remy. We issued a press release earlier this morning summarizing our operating results but the first quarter ended march 31, 2016, a more detailed discussion of our result may be found in our quarterly report on Form 10-Q filed earlier today. At March 31, 2016 the company's cash, cash equivalents, and marketable securities were approximately $44.6 million compared to $32.2 million as of December 31, 2015. During the first quarter of 2016, the company received approximately $17.5 million in proceeds from certain existing shareholders who exercise warrants granted in connection with a private placement in March 2015. Warrants were a total of approximately 3 million shares of common stock were exercised at an exercised price of $5.77 a share. Also during the first quarter the company ended it into a common stock purchase agreement with Dr. David Kupfer, a Director under which the company sold to Dr. Kupfer 181,488 shares of the company's stock at a price per share of $5.51 or gross proceeds of approximately $1 million. Research and development expenses were $5.4 million in the first quarter of 2016 compared to $4 million in the first quarter of 2015. Research and development expense in the three-month period ended March 31, 2016 and 2015 included non-cash stock-based compensation expenses of $0.2 million and $0.1 million respectively. Excluding stock-based compensation, total research and development expense related to drug development programs for the three-months ended March 31, 2016 and 2015 was $5.2 million and $3.9 million respectively. This increase in research and development expense primarily reflects increased expenses related to our Phase 2b clinical trial of MIN-101 and our Phase 2a clinical trial of MIN-117. General and administrative expenses were $2.4 million in the first quarter of 2016 compared to $1.9 million in the first quarter of 2015. General and administrative expense in the three-month period ended March 31, 2016 and 2015 included non-cash stock-based compensation expenses of $0.6 million and $0.3 million respectively. Excluding stock-based compensation, general and administrative expense for the three-months ended March 31, 2016 and 2015 was $1.8 million and $1.6 million respectively. Net loss was $8 million for the first quarter of 2016 for a loss per share of $0.29, basic and diluted compared to a net loss of the $6.1 million dollars or a loss per share of $0.31 basic and diluted for the same period in 2015. The proceeds generated from the recent warrant to exercised strengthened our financial position, and as a result, we expect that our cash, cash equivalents and marketable securities will be sufficient to fund Minerva's operations into the second quarter of 2017. Now I'd like to turn the call over to the operator for any questions.

Well, thank you everyone. I hope we addressed a lot of the issues you had in mind and we look forward to providing you with updates on our anticipated progress in the coming months. Thank you very much for attending.