Good day, and thank you for standing by. Welcome to the Minerva Neurosciences First Quarter 2021 Conference Call. At this time all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that today's conference may be recorded. I'd now like to hand the conference over to your host today, Mr. William Boni, Vice President of Investor Relations.

Thank you, Bill. Thank you so much. So, hello, everybody. I am really, really very proud and very excited to walk you through these recent results about the open label extension of our Phase 3 study. I think these data are really an important additional piece of information concerning roluperidone and the treatment of negative symptoms in schizophrenia. But before jumping into the data, I really would like to thank once more, all the patients, all the families, all the caregivers and obviously also the clinical sites here in the US and in Europe who have participated in this trial, because I know how difficult it is to be in a trial for more than one year. So let me jump into the data. And what you can see on Slide 4 is the objectives of this open label extension. The first point, as we have discussed in the past, is to look at long-term safety. This is to tick the box for one-year administration of the drug, but it is also very, very important to give us a better understanding of the long-term safety and tolerability of roluperidone. As you will see, I think this is a very important and extremely encouraging aspect for roluperidone. Negative symptoms are a core symptom of the disease of schizophrenia, but they are also the symptoms that are really long-lasting. Negative symptoms are present even before patients have their first episode of positive symptoms, and it is really the chronic part of the disease.

Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter ended March 31st, 2021. 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 and restricted cash at March 31st, 2021 were approximately $80.2 million compared to $25.5 million as of December 31st, 2020. In January 2021, the company received a $60 million cash upfront payment from Royalty Pharma in connection with Royalty Pharma's acquisition of the Company's royalty interest in seltorexant. We also have the potential to receive up to a further $95 million in additional payments contingent on the achievement of certain clinical regulatory and commercialization milestones. The significant non-dilutive funding provided by our agreement with Royalty Pharma, both immediate and potentially over the longer term, will support our top priority: the continued development of roluperidone, our lead asset. Recall that seltorexant is currently in Phase 3 clinical development by Janssen Pharmaceutica, a subsidiary of Johnson & Johnson, for the adjunctive treatment of Major Depressive Disorder with insomnia symptoms. 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. 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 $3.3 million and $8.1 million for the 3 months ended March 31st, 2021 and 2020 respectively, a decrease of approximately $4.8 million. The decrease in R&D expenses was primarily due to lower costs for the Phase 3 clinical trial of roluperidone as a result of the completion in May 2020 of the 3-month core study portion of this trial. Non-cash stock compensation expense included in R&D expenses was $0.6 million and $0.7 million for the 3 months ended March 31st, 2021 and 2020 respectively. G&A expenses were $4.2 million for both the three months ended March 31st, 2021 and 2020. G&A expenses included compensation costs, consulting expenses, and insurance premiums. Noncash stock compensation expense included in G&A expenses was $0.9 million and $1.5 million for the three months ended March 31st, 2021 and 2020 respectively. Net loss was $8.8 million for the first quarter of 2021 or a loss per share of $0.21 basic and diluted compared to a net loss of $12.2 million for the first quarter of 2020 or a loss per share of $0.31 basic and diluted. Now, I'd like to turn the call over to the operator for any questions.

Our first question comes from Jason Butler with JMP Securities.

Hi, thanks for taking the questions and Remy, I really appreciate you going through all the details there. Just thinking about, I guess the magnitude and progression of improvement. Are there historical data for patients with negative symptoms that kind of speaks to how likely they would be to recover in that manner without treatment intervention both again the magnitude and the progression of the improvement over the full one year?

Hi Jason, great question. Obviously, I was expecting this kind of question. First, it’s important to mention that maybe the study design we have used is not absolutely the same as what you can find in the literature, but nevertheless, you can find situations where we have a similar study design and you could get some more insight by comparing our data to existing data. So, I think what is very clear is that in most of the cases that I've seen, and in we could find in the literature, there is usually an improvement that occurs quite fast and afterwards, the results really flatten when you go over several weeks and obviously, several months. Yes, I'm speaking here about negative symptoms. If you go with patients who have an acute relapse of positive symptoms, as you know, when you bring them down, they have a small improvement of negative symptoms, which is the effect that I mean afterwards, things flatten. Basically, what it means, I think, is that there is no real specific improvement of negative symptoms, whereas in our case, I think it is also in the precautions of the study design of the open-label extension. I think it is fair to say that this continuous improvement over time is something, which to the best of my knowledge, would use the term, is unique. Now, in terms of the level of decrease again, we have to put it in the context of the patient population included in this study. Remember that we wanted to have patients who had a minimum score of 20 points in terms of negative symptoms as they needed to be stable before entering the study, and basically we ended up with patients who had a baseline score of around 25-26 points in terms of negative symptoms. So keep in mind that the minimum is 7 points. That's because when we are using the PANSS, there is no zero. One is absence of symptoms on each item, but where there is a consensus is that if you bring someone back to 20 points and below, those patients are probably starting to function again or functioning better, which by the way is demonstrated with our PSP data. So I think we really are at the level where indeed based on what is somehow consensus in terms of where you need to be in terms of negative symptoms to be able to function.

That's helpful, Remy. Thanks. And then just regarding the next steps with the FDA, what would be the trigger for the next FDA interaction? Is it the completion of the bioequivalence study? Obviously, we would expect you to submit a package that also includes the new LLE data, but any sense of what the trigger would be for the next meeting and when the next interaction with the FDA, a formal interaction with the FDA could happen?

Yes, I think formal interaction is the right term because we are indeed interacting with the FDA, as we interacted with the FDA before we started our bioequivalence study because we discussed the protocol. We also have already answered some of the questions that arose from the Type C meeting, and it is extremely clear that one important point to tick off is about the bioequivalence between the formulation which has been used in Phase 2b and Phase 3. And when this study is completed, we indeed will really start to finalize all that we need in terms of briefing book documentation in order to go back again to the FDA to discuss the next steps. This is also a timing issue, as well as the sequence of events, which will happen before we go again in front of the FDA.

Okay, great. Thank you and thanks for taking the questions.

Thank you, Jason.

Our next question comes from Tom Shrader with BTIG.

Good morning. Congratulations on the data and also on the perseverance. It's really remarkable especially in the phase of a second pretty good drug. So, my question has to do with your final points you hit on that I think are quite interesting: this idea that the drug gets patients to a good enough state in terms of negative symptoms but then they're able to form routines and get going on life again, and so you have this long-term effect. Do you need to sort out the role of the clinical trial environment in that? Do you think you need to do a year of placebo-controlled now and is that hard? And then the follow-up is, do you think the continued improvement in positive symptoms argues that it is a pharmacologic effect? So I'd just like to hear your thoughts on that idea.

Yes, so I honestly think, according to the guidance at the end of 2019, if you're dealing with this unmet medical need and if you really have a means of package we have today, I think we have enough data to see the agency again and obviously we are really listening to all the different comments we are receiving. Do we need a study where we are doing a one-year placebo-controlled and is it possible? I think it is possible to run a study like this. I think obviously it will give additional color about how meaningful all this is, but nevertheless, keep in mind that there is some blinding in this data. Historical comparisons are really speaking in favor of our data. If we have to do such a study, and I think it is an important study, then this should be a study which has to be done in Phase 4, and there are many more other studies which could be done in Phase 4 to show the full potential of the drug. Regarding the pharmacology point you're raising, obviously, you have to be very honest. When I started working on this molecule, I was convinced that the pharmacology is the right one to keep positive symptoms stable or to improve them. I was very young when I first worked on MDL 100907, which is a pure 5-HT2A antagonist and you know the history of this molecule. It was stopped because it was no better than haloperidol in terms of controlling positive symptoms, but it is completely clear that 5-HT2A antagonist can have an effect on positive symptoms. We have a single drug for acute episodes, which are antipsychotic systems and B2 blocking molecules. Definitely, there is something going on there. There is also interesting literature showing that for younger patients while the disease is really not already chronic, a treatment with a 5-HT2A alpha 1A molecule is probably better than treating them with beta blocking molecules. So, I think there is quite convincing literature out there. So again, this is an additional layer of having assets that can improve positive symptoms. Last but not least, if you go back to the history of sigma, 2 sigma licensing, long time ago, I was involved in one with a sigma molecule from Sanofi that I tested in my research institute. The hypothesis is that sigma modulates the dopaminergic tone. As you know, schizophrenia is not just about hyper dopaminergic activity but also about hypodopaminergic activity, particularly in the prefrontal areas of the brain, which might also be linked to negative symptoms. So, yes, I agree with you. I think the pharmacology is definitely contributing.

And if I could just ask a quick follow-up. Was the removal of drugs for positive symptoms entirely a complexity, or were these patients essentially so sure those drugs weren't working for them, that it was not an issue with treaters?

I think it was no longer an issue because we already had the data from the Phase 2b. Keep in mind that in the Phase 2b, we had a 6 months extension to the 12 weeks double-blind. At the beginning of the project, it was a challenge because yes, everyone believed, or believed modestly seeing that our data are not triggering a lot of research about what you should do to really help these patients and to keep them obviously stable in terms of positive symptoms, avoiding relapses and so on. A lot is going on, but I think we already had good data indicating that the risk is not really significant there. Keep in mind that if you have ever worked in psychotic facilities, you know that a patient does not become active in terms of positive symptoms immediately. This is a process that goes on for several days or weeks before the relapse occurs or the necessity for hospitalization is required. This is why I mentioned some of the parts because often some of the symptoms include more agitation and a bit more aggressiveness but also definitely insomnia. Skilled investigators are already aware about this, and they have the tools to pick up someone who might relapse.

Great. Thank you very much for all the details. And congratulations again.

Thank you so much.

Our next question comes from Jay Olson with Oppenheimer.

Great. Congrats on these new data and thanks for taking the questions. Can you just talk about the performance of the patients in the open-label extension who switched from placebo to active and how those patients compared to the patients who were active all along and what you might have learned from that comparison?

Wonderful. This is really a great question, and I think the answer is on slide 10, I mean on the summary table. So basically, I think the best interpretation I see of this data is that patients who completed the double-blind phase receiving placebo, let me call them placebo responders, while what you can see when looking to compare the different groups here, particularly with patients who have been treated for the configuration of the study with active drug versus those who switched to active drug after the double-blind phase. I think what is added to these patients in terms of improvement is the aspect of negative symptoms related to functioning, which is this emotional experience that the PSP is really picking up. We are really improving them specifically in terms of negative symptoms in terms of functioning. This needs more detailed analysis, but I see this regularly popping up and we are really trying to integrate the data here. Clearly, they are improving, and from what I can see from the data as of today is just having the additional boost in terms of the specific effect itself in terms of negative symptoms and function.

Okay, great. Thank you for that. And then maybe if you could talk about from a big picture perspective, why has it been so difficult to develop drugs to treat the negative symptoms of schizophrenia? And then from a competitive perspective, maybe if you could compare roluperidone to pimavanserin in terms of the mechanism and the data that you have or any other drugs in development for negative symptoms. Thank you.

It's a great question and I should not be too long. Yes, we have to recognize that schizophrenia is basically about negative symptoms, and this is the most enduring symptom onset of symptoms in the disease present in adolescence before it is a full-blown disease and extremely chronic over time. Targeting this aspect needs to have a drug that targets the right pathways in the brain. I'm hoping that after approval, we will conduct some studies where we are introducing it to adolescents and patients at risk of the first episode, as the likelihood of having these patients is even higher. Long term, don't take me wrong, antipsychotics, or in other words, dopamine-blocking molecules, are important molecules but are mainly viewed as major tranquilizers to treat the acute part of the diseases. It is good to see that we now have treatments that can block dopamine without being sedating and also less impairing in terms of negative symptoms. Data shows that when you lower the antipsychotics, you see patients functioning a little bit better. This is the most difficult part to treat. Keep in mind that negative symptoms can be divided into several constructs: avolition, anhedonia, and so on. Personally, I believe we need to have an effect on avolition because when you consider patients who were engaged and interested in many things before losing this capacity, this can be the onset of all symptoms seen later in the disease. I think our data shows that we are improving avolition and afterwards, a positive feedback loop starts. Long story short, a drug needs to be non-impairing and need to target the right pathways in the brain involved in negative symptoms. Afterward, patients gain insight with the support of caregivers, and slowly but surely they can cope with everyday life. This is why I'm hesitant to compare ourselves with competition, but it's clear that 5-HT2A activity is important for treating overall psychopathology, particularly positive symptoms. Mind you that 5-HT2A molecules also affect sleep, which is related to memory consolidation and cognition, but I honestly think that it may not be completely sufficient for a complete recovery and to have a patient functioning at the end of the day. This explains why I shouldn't stop here when comparing to competition, as it would not be fair to my colleagues trying to create other innovative treatments.

Great, thank you very much. It is super helpful. I appreciate you taking the questions.

Thank you.

Our next question comes from Douglas Tsao with HC Wainwright.

Hi, good afternoon or good morning and thanks for taking the questions. Just, after we saw the data from the placebo-controlled portion of the study, it sort of indicated that we are going to focus in on the 64 mg dose, just given what we saw from the open-label extension and really the robustness of what we saw with 32 mg. I know it seems very manageable. We did see some QT prolongation. Does that sort of make you think or sort of increase the reason for pushing development for the 32 mg as well, just to have that as a therapeutic option?

We discussed this and I’m really always in favor of having different doses as options for treating the condition. Experience shows that it is very helpful. This said, when looking at the data, I think it's fair to say that the two doses are showing very, very similar effects, but it is also fair to say that 64 mg seems to do a better job in terms of functional improvement. It's quite clear in terms of the PSP that 64 mg is doing a better job. I'm not saying that 32 mg is not doing anything. No, it is definitely improving patients, but 64 mg seems to be better. We do not experience sedation or anything like this, so probably 64 mg is a better dose to truly help patients minimally at the beginning of treatment. Long story short, if we could convince the FDA that both doses are helpful, maybe 32 mg as a maintenance dose and 64 mg as a dose to help patient during the initiation of treatment, this would be great news. Keep in mind that the 32 mg is a dose we will continue to work on because post-approval we will have to do pediatric studies, and for the pediatric study, 32 mg is one dose we are considering. We will accumulate data also with the 32 mg, but I agree with you, the two doses are helpful; even so, I think 64 mg is a little bit more effective in terms of improving function.

And Remy, just as a follow-up on the dosing. In talking to clinicians, it is clear that you've demonstrated that this drug can have significant utility as monotherapy. However, many clinicians think of this as being used in combination with another antipsychotic. Do you think in that context that perhaps the 32 mg might be the way to go, or would you prefer the 64 mg and have one other quick follow-up after that?

It's a great question. I think what this data will generate is a lot of discussions about whether all patients need chronic treatment with antipsychotic. This is a broader question going beyond Minerva. However, we could consider a strategy to treat patients with 32 mg as the maintenance dose, and use either 64 mg or an antipsychotic to help manage acute episodes of agitation or more predominant positive symptoms. This might be a way to move forward. This opens up a range of different strategies for a larger number of patients suffering from schizophrenia.

I understand that the data suggests you may have a drug that could be approved. If the agency were to ask for an additional Phase 3 study based on the findings from the open-label trial, would it be worthwhile to consider a longer period of double-blind placebo-controlled study? Although this might affect comparability, it seems the benefits could increase over time.

It's a great question, Doug. If you look through the data, you remember we had a p-value at 4 weeks and 8 weeks placebo compared to 64 mg in this trial that was a double-blind phase, and we had a significant difference in the Phase 2b study even in the modified ITT population. I think we had an extremely positive Phase 2b study because of the drug. We suffered a little from inflation, although it was a double-blind phase. I agree with you, a longer study could help control the placebo effect better. I'm not saying that we should do a longer study, but I think it is something to consider as we think about potential next trials.

Okay, great. Thank you so much and congrats on the open-label data.

Thank you, Doug.

Our next question comes from Myles Minter with William Blair.

Hi, everyone. Congrats on the data and thanks for taking the questions. That 11.7% relapse rate seems pretty impressive and definitely above the expectations of clinicians I've talked to on roluperidone monotherapy here. A brief look at the literature suggests that it was an acute psychosis, and the relapse rates can be as high as 40% to 80% over 12 months when you withdraw therapy. I know this is a completely different patient population. How do we think about that 11.7% in relation to what we would expect in the real world with this particular patient population in the Phase 3?

Yes, great question, Myles. When you're in the trial, things don’t always completely align with real-world clinical practice. We did try to follow clinical practice closely. We switched quite quickly from the antipsychotic to our drug in monotherapy, which aligns with what you observe in clinical practice. I think it can be compared to what will occur in real life. Regarding your question about this specific study population, I see a distinction. We took patients at a different level compared to typical relapsed patients. Our inclusion-exclusion criteria are quite similar to what you have in other trials. We do not types of criteria for the total PANSS score. We have criteria to check that the patients have a certain level of negative symptoms, and we switch them from antipsychotic to our treatment when they are stable in positive symptoms. We're pleased to say that the positive symptoms score of 14-15 points is quite low, but to review, our study population is different from the general patients in clinical practice.

I completely understand, and regardless, the relapse rate is impressive. Maybe one on the bioequivalence study as well. There was a mention in the press release this morning that you'd be testing an additional commercial and scalable formulation or at least one of them. Is the aim in this trial still to determine non-inferiority between the Phase 2b, the Phase 3, and these commercial formulations in terms of area under the curve exposure? Are we going to be looking at that BFA 5-20 metabolite again that I know was concerned with QTc prolongations at the Phase II? Any thoughts there would be helpful.

No, I mean you're completely describing it correctly. Yes, the efficacy is driven by exposure because we did a lot of PK-PD modeling. We will do this with data including the extension data. This is the primary objective for sure, and we will continue to control the metabolite as well.

Okay. And the final one is just for Geoff. You mentioned $95 million in potential milestones from the seltorexant royalty to Royalty Pharma. Some of those are linked to clinical milestones. Can you comment on whether any of those milestones are tied to the results of one of those trials, or does the whole program have to be completed before you potentially receive a milestone there? Anything you can disclose would be great.

Yes, there is a mixture of triggers. Part of it is due to clinical progress; a significant part is due to regulatory approval in different geographies, and there are some sales bonuses there as well.

Okay, cool. Thanks for the questions and congrats on the data, it looks great.

Thank you.

Thanks, Myles.

That concludes today's question-and-answer session. I'd like to turn the call back to Remy for closing remarks.

Thank you. So, thank you all and hopefully you enjoyed it. I think we continue to work harder to put together the best package here because I think it is extremely motivating with the data we’ve seen today, and it is also extremely important that this draft is moving towards patients who are in need of new treatments for negative symptoms because keep in mind that there is no treatment approved as of today in the U.S. for negative symptoms. So, I'm really looking forward to updating you very soon about the bioequivalence study, about pharmacology, and about all news coming up. Thank you again, and hope to speak with you very soon. Bye. Have a nice day.

This concludes today's conference call. Thank you for participating. You may now disconnect.