Welcome to the Minerva Neurosciences First Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session following today's prepared remarks. This call is being webcast live on the Investors section of Minerva's website at ir.minervaneurosciences.com. As a reminder, today's call is being recorded. I would now like to turn the conference 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 2020 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 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. Rick Russell, President; 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 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 March 31, 2020, filed with the SEC on May 4, 2020. Any forward-looking statements made on this call speak only as of today's date, Monday, May 4, 2020, 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. I hope everyone is doing well. Today, I will focus on Minerva's two advanced clinical stage products, roluperidone, which is in a pivotal Phase 3 trial, and seltorexant, which has completed Phase 2b testing. For roluperidone, we are rapidly approaching the company's key event for 2020—the readout of top-line results expected this quarter from our Phase 3 trial with this compound to treat negative symptoms in schizophrenia. For seltorexant, we are evaluating along with our partner Janssen Pharmaceutica, a number of protocols for Phase 3 trials. I will begin with roluperidone. The Phase 3 trial is a randomized double-blind parallel-group placebo-controlled 12-week study to evaluate the efficacy and safety of 32-milligram and 64-milligram doses of roluperidone, as measured by the Positive and Negative Syndrome Scale. The primary endpoint is a Marder negative symptoms factor score. Secondary endpoints include the personal and social performance scale and clinical global impression of severity. As we announced last February, a total of 515 patients have been enrolled in this trial at clinical sites in the U.S. and Europe. The patients have been randomized 1:1:1 to 32-milligram and 64-milligram doses of roluperidone and placebo. The core 12-week double-blind phase of the trial is followed by a 40-week open-label extension period, during which patients on the drug have the option to continue receiving their original dose and patients on placebo may receive one of the two doses of roluperidone. Progress in this trial has been unaffected to date by the coronavirus pandemic. We are continually monitoring each trial site and our contract research organizations to ensure the safety of core patients and their access to study drug. The last patient visit has taken place in the 12-week double-blind phase of the trial. I am pleased to report that in total, 362 patients have completed the double-blind phase, and 333 patients from the double-blind phase have elected to transition into the open-label extension period, and 92 patients have completed the extension phase as of April 30, 2020. We look forward to the database log and beginning of data analysis late this month. The design of the Phase 3 trial has been informed by feedback from the FDA beginning with our end of Phase 2 meeting and subsequent communication with the agency. The prominent role of negative symptoms in schizophrenia has been increasingly highlighted by the key opinion leader community since we initiated the Phase 3 trial. In fact, our development of roluperidone has been shaped by a fundamental view of schizophrenia. While positive symptoms present intermittently during the course of the disease, negative symptoms persist and worsen over the lifetimes of the majority of patients, thus severely limiting functional ability and preventing social and vocational integration over the longer term. No drugs are currently approved to treat the negative symptoms of schizophrenia or negative symptoms present in other conditions, including developmental disorders, affective disorders, and neurodegenerative disorders. We are excited about the possibility of the Phase 3 data addressing this significant unmet medical need and pointing the way to a new treatment paradigm for negative symptoms beginning with schizophrenia. Moving on to seltorexant, we are looking to build upon the three positive Phase 2b trials and one Phase 1b trial completed during 2019 as we plan the Phase 3 program for this promising compound. Results of those trials showed that seltorexant has positive effects on insomniac patients without comorbidity, including elderly patients with a favorable safety profile. In patients with major depressive disorder, who do not respond adequately to SSRIs and SNRIs, seltorexant also showed improvements in mood particularly in patients with insomnia. The current target indication under consideration for Phase 3 is adjunctive treatment of major depressive disorder in patients with insomnia symptoms. We and our partner Janssen are discussing feedback received from the U.S. FDA during our recent end of Phase 2 meeting into the Phase 3 development strategy, including several clinical protocols to support that indication. Our discussion with Janssen also includes decision-making control of the program and achievement of defined milestones under our agreement. Before I conclude, I would like to offer a few additional thoughts about roluperidone. To the best of our knowledge, roluperidone is the only drug shown to date to have a specific and direct improvement of primary negative symptoms in a randomized double-blind placebo-controlled Phase 2b clinical trial. Additional data analysis from that study shows that patients also improve in terms of cognition, mood, and functioning, further demonstrating what we believe are the unique qualities of this agent. Among emerging therapies in development for negative symptoms, roluperidone is the most clinically advanced. The Phase 3 trial has been designed to test its efficacy as monotherapy versus placebo, absent the cathartic effect of co-administration with atypical antipsychotics. We are excited about the possibilities for roluperidone, as we plan to share the top-line results from the Phase 3 trial in the not-too-distant future. I will now turn it over to Geoff.

Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter ended March 31, 2020. 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 March 31, 2020, were approximately $37.6 million, compared to $46 million as of December 31, 2019. We presently 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 from today and into mid-late 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 $8.1 million in the first quarter of 2020, compared to $11.6 million in the first quarter of 2019. The decrease in R&D expenses primarily reflects lower development expenses for the Phase 3 clinical trial of roluperidone and the Phase 2b clinical trial of MIN-117. R&D expenses are expected to decrease during 2020 with the completion of the Phase 2b trial of MIN-117 and the 12-week double-blind portion of the Phase 3 clinical trial of roluperidone. General and administrative expenses were $4.2 million in the first quarter of 2020, compared to $4.7 million in the first quarter of 2019. This decrease in G&A expenses was primarily due to a decrease in non-cash stock-based compensation expenses and a decrease in professional fees. Net loss was $12.2 million for the first quarter of 2020 or a loss per share of $0.31 basic and diluted, compared to a net loss of $15.8 million for the first quarter of 2019 or a loss per share of $0.41 basic and diluted. Now I'd like to turn the call over to the operator for any questions.

Thank you. Our first question comes from Jason Butler with JMP Securities. Your line is now open.

Hi. Thanks for taking the questions. Rémy, I know you talked about this before, but with the data for roluperidone fast approaching, just wondering if you could remind us of the baseline characteristics you've seen in the Phase III trial on a blinded basis versus what you had in the Phase II trial. And then give us an update on what you've seen again on a blinded basis in terms of positive symptom relapse? Thanks.

Hello, Jason, hello everybody. So clearly, I mean as you know the – what we had in the Phase IIb was for negative symptoms around 25 points at baseline. And it is true that I mean we are monitoring obviously the Phase III completely blinded by merging together all the patients who enter the study. And I have to say that we are ending up with exactly the same entry score in terms of negative symptoms which is obviously great news. And I can even give you a bit more granularity, telling you that I mean what we see over the first 12 weeks during the double-blind phase in terms of the behavior and the dynamic of the negative score is really overlapping between the two studies, the Phase IIb and the Phase III. Now concerning the relapses, there is again one point which is a debate about what is a relapse. But I mean what I can tell you is that, comparing again the Phase IIb and the Phase III, the level of relapses we can see is limited and is in line between the two studies.

Great. And then just one more for me. Can you just speak a little bit to where you are in your commercial preparations? And what your goals are to achieve throughout this year as you ramp towards a potential launch next year?

Yes, sure. So, Jason, good morning. So a couple of things there, so first of all you may recall we've already signed a commercial supply agreement with Catalent. So we'll obviously continue the work to be ready to have commercial supply available at launch. We've also received conditional approval from the FDA for a trade name. We haven't released that yet; we will sometime in the future. Once the data reads out positive, we'll enter more formal dialogue with potential co-promote partners. There are a number of companies that already have established relationships within psychiatry here in the U.S. market. So I think we're quite interested to reach out and talk to some of those folks and see if we can essentially align with someone that has an existing infrastructure and do a co-promote with someone like that.

Thanks for taking the question. And looking forward to the data.

Thank you, Jason.

Thank you. Our next question comes from the line of Joel Beatty with Citi.

Hi, thanks for taking the question. The first one is on data integrity. There had been an issue that came up around late last year. So I guess just to confirm for the 362 patients that have completed the double-blind study, have you reviewed that you'll have data on all those patients?

Joel, yes—clearly no impact on data integrity, as I explained in one of the previous calls. This mostly impacted the speed we could screen and include patients in the study of randomized patients in the study, but because we took all the precautions from the beginning to have for example two aliquots of blood samples on site—one sent to be analyzed centrally and one kept on site. I mean, we really did not experience any impact about what happened a few months ago here. So, clearly, very clearly all these 362 patients can be fully analyzed. And maybe one word about COVID because I guess this is also a very hot topic—also no impact of COVID as we mentioned regularly over the past.

Terrific. And I guess a question given that there are two dosing arms, could you remind us of the stats plan?

This is a great question. So first of all, I mean one interesting point is that even if it is not requested, we shared our statistical analysis plan with the FDA. Yes? And we received feedback which already confirmed the way we would like to analyze the data. We will analyze the data because it's not becoming clear reality, but the statistical analysis plan is ITT. We're using the MMRM approach and it is corrected for type one error with the Hochberg correction. So basically what it means is that as a primary endpoint you're first doing the comparison between placebo and the highest dose of 64-milligram. If you're hitting the P values of 5% significance, you can do the analysis of the second dose with the same 5% value for P. And if not, you have to divide by two the P-value for the second dose. And basically this means that, I mean it's no longer P0.05 but it will be P0.025 in order to claim that 32-milligram is significant. So, this is a strategy, which by the way was the same we used in the Phase 2b because as you remember the Phase 2b has been analyzed like a registrational study.

Got it. Yes, that makes sense. Maybe one last question on seltorexant. It sounds like you've had discussions with the FDA on that program going ahead. If it does, could you tell us about how the costs would be split for the next part of development?

I guess I give this over to Geoff. So, Geoff, can you answer this question, please?

Sure. Yes. The agreement is very clear in terms of each party's responsibilities with regard to funding the Phase 3 part of the program. Back in 2016 we were required to amend the agreement that we have with Janssen as a result of European Commission intervention in connection with the European insomnia market and the Actelion transaction, which J&J was seeking to get approval for at that time. But basically the amendment to the agreement requires Minerva to cover the full cost of the Insomnia Phase 3 program. J&J will give a $40 million contribution to the Phase 3 insomnia program. And then on the other side, on the MDD program, we split the costs 40% Minerva and 60% J&J.

Great. Thank you.

Thank you. Our next question comes from the line of Biren Amin with Jefferies. Your line is now open.

Yes, hi guys. Thanks for taking my questions. So, Remy, in the press release, it seems that you have a 30% dropout rate. Is that how we should think about patients that have completed a trial versus enrolled? And how does this number compare to what your assumptions were for the trial design? And I guess were there any imbalances across the three arms in terms of dropout rate?

So, the last question I cannot answer because the study is blinded. But first one, the first part I can answer, yes. So, the assumptions if you remember were 40% dropout over the first 12 weeks in the double-blind phase, and we ended up with 30% dropout, which if you remember is really in line with what we had in the Phase 2b. So, I think this is good news, yes, because we have less dropout than what we had in our powering assumptions.

Okay. And then on the patients that completed the open label, I think you have 92 patients that have completed the open-label extension. Can you tell us anything about these patients when they came into the open-label versus when they exited? Are you able to look at that data given its open-label data to see what the changes or benefits were in terms of negative symptoms in these patients?

Yes, patients on 32 milligrams will remain on that dose, and those on 64 milligrams will stay on 64. Placebo patients moving into the open label phase will be randomized to one of the two doses. Currently, we do not know the specific dose each patient has, only that they are not receiving placebo. However, we are closely monitoring these patients. The main goal of this extension study is to ensure that 100 patients have been exposed to the drug for one year, focusing on safety. This is a necessary step to move forward with the New Drug Application to the FDA. This is promising news as we still have many patients enrolled, with 92 already having completed the study. We are in a strong position to achieve this goal. We're actively tracking their safety and efficacy, and although we don't have as many details as we did in the double-blind phase, the efficacy seems to mirror what we observed in Phase 2b. Everything looks positive and reassuring thus far.

Okay. And then maybe a question on seltorexant. What are the key gating items starting the Phase 3? And do you anticipate start of Phase 3 this year?

We recently had a meeting with our colleagues from Johnson & Johnson, where we received several pieces of feedback. This meeting mainly focused on the MDD indication, with the key question being whether these patients are responding better with insomnia as the primary population. This aspect remains somewhat unclear. Another topic of discussion was how to quantify certain measures both subjectively and objectively, and this has now been clarified. Currently, the protocols have been adopted and finalized, and we are moving forward with the feasibilities. However, the COVID pandemic has complicated these feasibilities, so we are working through that. Once we are ready, we will provide more details. Overall, things are progressing, but it is a bit slower than expected due to the pandemic.

Okay. And then maybe just the last question. What are your thoughts on R&D expenses once the Phase III finishes?

As you know, I have a lot of ideas, yes, and I think the good news is that, I mean, if we have positive data with roluperidone, we have really a lot of things we can do inside the schizophrenia indication. And as you know, because negative symptoms are really this transdiagnostic symptomatology you will retrieve in several different disorders in the space of psychiatry and even urology, we will obviously work on all this. So as of today, we have put together the perfect word, and we end up with I think too many studies. So we are currently discussing internally, taking also advice from some of our carriers on what would be the priorities for studies to do after top-line results. So stay a little bit with us. We are brainstorming. We are coming up with the best way moving forward. But I mean, at minimum, we have two or three very exciting studies we have in mind, which I think will cover highly unmet medical needs and that will create a lot of value. So this is what you have in mind. And beyond the roluperidone, I think we have also a plan in place in order to move forward, obviously to work on the seltorexant program, but also to move forward the other molecules in our pipeline. So a lot to come. But again, work in progress, but I think we have a lot of clarity now just priorities to be made.

Great. Thank you.

You're most welcome.

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

Hi, guys. Congrats and thanks for taking the questions. Just Rémy, last time we talked just over a month ago, you may have mentioned that COVID-19 was not going to impact the top line data, but potentially the open-label portion. I'm wondering have you got any more clarity into the types of delays we may or may not expect there. And if there are—are these U.S. sites specifically, or are these broadened across the entire global nature of that trial? I've got a follow-up after that. Thanks.

Yes, Myles, so I guess, what I said is that for the moment, we have no impact on the extension due to COVID. But obviously, I cannot predict what will happen moving forward, yes. But as of the end of last month, end of April, we had no impact of COVID on the extension. So—which is good news. I think we really put in place. We have been extremely reactive, and I have to say that the guidelines coming out from the FDA and EMA have helped a lot. But we have been extremely reactive with our CRO and with the sites to really implement all that is possible in order to continue the exploration in terms of safety and efficacy for the patients. As you remember, I think we also discussed about the fact that we have— in each country, we have enough drug in the country. So this will not have an impact to bring the drug to each patient that was in the extension and to each site, obviously. So, so far so good. We continue to monitor. We are very interactive. We obviously are using the—again, the possibilities given by the EMA and FDA guidelines about, for example, remote monitoring these kind of things. But again, today we have no impact as we speak. Sorry, as the last point about the U.S. So last point about the U.S., sorry, I forgot this one. Remember that I mean, the U.S. started before the European sites. And clearly, I mean, we have really a limited number of U.S. patients that were still in the extension. So I think we will not have any problem in the U.S. with the extension as well. So definitely, I mean, no impact in the U.S. for the moment.

So it would be fair to say that the 92 patients that have completed that extension phase a significant proportion of them are indeed U.S. patients?

It's a mix. But I mean, clearly, the first ones we have completed the 12 months, sorry, yes, definitely were coming from the U.S., indeed, yes.

Okay. Cool. And then just on seltorexant. Curious in the press release you may have mentioned that you're chasing this adjunctive MDD indication comorbid with insomnia, but you didn't mention about the insomnia program alone. So I'm wondering whether or not MDD is taking the priority here. Obviously, Janssen plays a large part in that. And then obviously with MDD trials placebo responses are crucial to the outcomes of those trials, I'm wondering whether the placebo response rates in patients that are comorbid with insomnia different to those without. And whether that's related to background medications like zolpidem and things like that that these patients may be taking coming into that potential trial? Cheers.

Great questions, like always. So, clearly, I think the two indications are part of our objectives to move forward. But I mean the insomnia data, I mean in patients without any comorbidities, we are so clear. But I mean, this is a straightforward process. I mean clearly remember, we had really a very nice data in adults and in elderly and we were better than the standard of cares and zolpidem, yes, and the tolerability profile was excellent. So here, I mean, it's quite an easy path forward, yes, I mean, no really big surprise. Why it was a little bit more tricky? Obviously, was in the MDD indication because clearly, when you have a complaint of insomnia and MDD, clearly, I mean the response is much better. There is no doubt about it. This is data-driven. There is no doubt about it. I mean, these patients are responding better. And when you're looking to the rate of response and the delta between treatment and placebo, I mean this becomes really very, very significant and very, very meaningful. So I do not want to say clinically meaningful because I don't know if this is clinically meaningful, but at minimum these patients are doing much, much better as when they have insomnia and MDD, yes. So this is the reason why it took a little bit longer to think about all this. Now in terms of placebo response, I have no—I have not the final answer to your question because I think we did not best of my knowledge, maybe my colleagues in R&D did it and we'll be happy to report if I mean it has been done later. But I don't have any notion of having a different placebo response. As you know, placebo response is how you select patients and how you run your trial, but I have no good knowledge about is a difference. But what is clear is that, when you're looking again to the difference we have seen between treatment and placebo if the patients have insomnia in addition to their MDD disorder, there is no doubt that I mean we have a real drag effect here. So, I'm very confident that moving forward, we will not really struggle with the placebo effect. What is important, I think to mention, and this is a much more general comment and which is going beyond seltorexant is that I think with the current ongoing pandemic, I think the patients suffering from MDD have probably not the same phenotype than what we have seen before the pandemic, and I think we have to think hard about what will happen after the pandemic, yes, because, as you know people are losing their jobs, people are stressed, people are more anxious. So I think this is something we have to reconsider when we are running again discussion trials. So—but this is maybe another debate, a more general debate. But I think we are really considering this. Because I think it becomes important, and maybe—and this is just an expectation the insomnia parameter will be even more important here to consider.

That’s fair. Thanks for the questions.

You are welcome.

Thank you. Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Your line is now open.

Hi, good morning. Thanks for taking the questions. Just quickly, in terms of how long do you think—once you get the 100 patients, which just seems imminent in the extension, how quickly can—would you be in a position to file the NDA for roluperidone just given the timing of the readout for Phase III? Thank you.

Doug, this—as you know, I mean it's not ethical to stop any patient if he stays into the trial until the end of the 12 months. So basically, if I mean some of these last patients who have completed the double-blind phase ended into the extension, so if these patients are staying in the 12 —nine months, following the double-blind phase to tick the box of 12 months, I mean they will go to the end. And so the extension data we will get—how many we will get? Probably we'll get much more than the 100 we need to tick the box about safety, but the extension has to be completed. So this will happen beginning of next year as the end of the first quarter or so. So clearly we cannot change this. But so what we will do, as you know, and this is now becoming more and more common, is that the FDA is really very open to have this kind of pre-NDA meeting, yes. And we are exchanging on a regular base with the FDA. And when we have the top-line results, we will obviously share this with the FDA, discuss it with the FDA. And my colleague, Jay Saoud, who is in charge of R&D has really worked a lot, and we have a lot of outputs in addition to the primary and secondary endpoint in order to really understand fully understand the data. So we will digest all this, hopefully based on positive data, and we will start to work with the FDA. But again, we need to go to the end of the extension to have a complete package for the NDA.

Okay. Great. Thank you.

Welcome.

Thank you. This concludes today's question-and-answer session. I would now like to turn the call back to Remy Luthringer for closing remarks.

Yes. Thank you so much. So thank you everybody for listening to our earnings call. It is obviously a very important moment for the company. We are very close now to the readout of a lot of work, a lot of hope for patients, and hopefully a lot of value creation for our shareholders. So, I am really looking forward to update you very, very soon about our Phase III results. Thank you all and have a very nice day.

Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect. Have a great day.