Neumora Therapeutics, Inc. Q2 FY2025 Earnings Call

Good afternoon, and thank you for joining Neumora Therapeutics Second Quarter 2025 Financial Results Conference Call. Before we begin, I encourage everyone to go to the Investors & Media section of our website at neumoratx.com, where you can find the press release related to today's call. With me today from Neumora are Chief Executive Officer, Paul Berns; President, Joshua Pinto; Chief Operating and Development Officer, Bill Aurora; Chief Scientific Officer, Nick Brandon; and Chief Financial Officer, Michael Milligan. I'd like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially. Please review the risk factors discussed in today's press release and in our SEC filings for additional details. With that, I'll now turn the call over to Paul.

Thanks, Helen. Good afternoon, everyone, and thank you for joining us. At Neumora, we are on a mission to address the largest population health challenges of our generation and to do so at scale. To achieve that goal, we know that we need to generate better medicines, therapies that enable better outcomes that meaningfully improve the treatment of prevalent diseases and ultimately that positively impact quality of life for patients and their families. With that aim in mind, we built an industry-leading pipeline targeting some of the most prevalent and burdensome brain diseases. Our approach is centered on advancing programs with best-in-class pharmacology, targeting novel mechanisms of action with the potential to improve upon the current standard of care for hundreds of millions of people. We are proud to be making important progress toward that goal. Today, we announced that we prioritized obesity as the lead indication for NMRA-215, our highly brain-penetrant NLRP3 inhibitor. An increasing body of evidence supports the need for the role of centrally-acting drugs to drive weight loss in obesity, and NLRP3 inhibition in particular has shown promise across multiple studies. Importantly, recent data suggest that molecules with high CNS penetration and activity are required for efficacy with this target. Currently, obesity and overweight affect more than 2.5 billion people globally. And by 2035, that number is expected to increase to up to 4 billion people. The need here is immense. Obesity is associated with significant negative outcomes and lower quality of life, and there is room to improve upon the efficacy and tolerability of the current generation of incretin therapies. In fact, up to one-third of patients are nonresponders to current therapies, and do not experience clinically meaningful weight loss. Additionally, patients experience numerous on-target GI adverse effects, and weight regain is common after patients stop taking these drugs. These challenges are highlighted by the real-world use data on GLP-1. A recent real-world study found that 68% of people taking a GLP-1 for obesity discontinued use of their medication within 1 year. And research from the Blue Cross Blue Shield Association found that 58% of patients discontinued use before reaching a clinically meaningful health benefit. We believe that NLRP3 inhibition may offer an efficacious, well-tolerated treatment option for obesity, potentially as a monotherapy in combination with GLP-1 medications or as a maintenance treatment option. Our deep expertise in neuroscience and specifically in developing highly brain-penetrant chemistry makes Neumora uniquely positioned to bring a potential new mechanism to this large and growing public health challenge. The breadth of our pipeline and its potential impact is immense, and we are in a strong position to translate that science into real-world therapeutic breakthroughs. We expect to have up to 6 clinical data readouts in patients over the next 18 months, and I'm excited to continue to build on this momentum. I will now turn the call over to Josh Pinto, President of Neumora to review our pipeline updates.

Thanks, Paul. We continue to make important progress across our pipeline, which is a direct reflection of our highly productive team, differentiated approach to neuroscience drug development and rigorous prioritization of our pipeline. With the initiation of our Phase I study of NMRA-861, we now have 3 clinical stage assets advancing through development, each with near-term catalysts on the horizon including data from our Phase Ib study of NMRA-511 in Alzheimer's disease agitation, which is expected around year-end. Top-line data from the optimized Phase III KOASTAL program with navacaprant in major depressive disorder, with the first top-line data expected in the first quarter of 2026. And Phase I SAD/MAD data for our recently announced M4 PAM, NMRA-861, which is anticipated in the first quarter of 2026. Additionally, we expect to bring another M4 PAM, NMRA-898, into the clinic in 2025. We are currently running a preclinical diet-induced obesity model with NMRA-215 in mice, a model that we believe is highly translatable to the clinical setting. We are excited to provide more details on the DIO data this fall, which we believe has the potential to be highly compelling. Looking forward, we expect to initiate clinical studies with NMRA-215 in the first quarter of 2026. As we continue to prioritize our pipeline, we are focused on allocating resources to the programs we believe will make the biggest difference for patients. Given that focus, we will not be advancing our discontinued program here. As you've heard, we have a wealth of opportunities at Neumora and are entering a catalyst-rich period. With that in mind, we plan to host an R&D event in the fourth quarter of this year to discuss our programs in more detail. Each of our programs targets a substantial unmet need and represents a meaningful market opportunity. Our development strategy has multiple pathways for success and the potential to deliver multiple breakthrough and blockbuster therapies to patients in need of better treatment options. And we look forward to sharing more detail later this year. With that overview, I will now turn the call over to Bill to provide an overview of our clinical programs.

Thanks, Josh. We designed our clinical programs to target mechanisms of action that we believe have the potential to fundamentally change how the diseases are treated. Our approach is grounded in strong scientific rationale and a commitment to improving patient outcomes. This is clearly seen in our newly initiated Phase I study of NMRA-861. NMRA-861 is a highly potent and selective M4 Positive Allosteric Modulator, or PAM, which we believe offers best-in-class pharmacology. Schizophrenia is a complex disorder, and the effectiveness of current treatments is often limited by suboptimal efficacy, side effects, and high rates of non-adherence. We believe M4 PAMs represent a promising new class with the potential to deliver a more favorable therapeutic profile, including efficacy, improved tolerability, and once-daily dosing. NMRA-861 demonstrated robust activity in preclinical efficacy models and was also well tolerated in preclinical safety studies, with no convulsions observed in rabbits, dogs, or rats. NMRA-861 is currently being evaluated in a Phase I single ascending dose and multiple ascending dose study in healthy adult participants and adults with stable schizophrenia. We look forward to reporting data from that study, including safety and tolerability, human pharmacokinetic data confirming the potential for once-daily dosing and central nervous system penetration in the first quarter of 2026. Additionally, we expect to bring another PAM into the clinic this year as we continue to advance our broader M4 franchise. We also have upcoming clinical milestones for navacaprant and NMRA-511. Enrollment is ongoing in the KOASTAL program, and we continue to expect top-line data from KOASTAL-3 in the first quarter of 2026 and KOASTAL-2 in the second quarter of 2026. Additionally, we expect top-line results from our Phase Ib signal-seeking study of NMRA-511 in Alzheimer's disease agitation around the end of this year. We have made meaningful progress across our robust and growing pipeline with multiple programs advancing towards near-term clinical milestones. With our robust pipeline and R&D efforts, we believe we are poised to bring forward novel therapeutics and deliver transformative treatments to millions of patients around the world. With that, I'll now turn the call over to Mike for a review of the financials.

Thanks, Bill, and good afternoon, everyone. Our financial results for the second quarter of 2025 are detailed in the press release that we issued this morning. I'd like to take a moment to provide some context and highlight a few key points. We ended the quarter with $217.6 million in cash, cash equivalents, and marketable securities as of June 30, 2025. We anticipate our cash runway to support operations into 2027, well beyond all of our upcoming clinical milestones. Our total net loss for the second quarter was $52.7 million, compared to $58.7 million for the same period in 2024. This decrease was primarily due to a reduction in stock-based compensation and personnel-related expenses and a reduction in clinical trial costs. With that, I'll now hand the call over to Helen to manage Q&A with the operator.

Thanks, Mike. Before I turn it over to the operator, I'll ask that you limit yourself to one question. If you have additional questions, please feel free to return to the queue. Now I'll turn it over to the operator to handle Q&A.

Your first question comes from Brian Abrahams of RBC Capital Markets.

This is Joe standing in for Brian. Can you discuss the preclinical study design in obesity, the type of diet being used, the potential combination of GLP-1s, and the comparator arms planned for the study? Are there specific aspects of weight loss you aim to demonstrate, such as improved quality of weight loss or maintenance of weight loss after GLP-1 withdrawal?

Thanks, Joe. This is Josh here. I'll take that question. For our program, NMRA-215, which is our NLRP3 inhibitor that we're moving forward, and we've announced that we prioritize in obesity. The next step, as you've highlighted, will be to run a diet-induced obesity study in mice. Part of the reason we're so excited about this study is we know that this model really translates between the animal setting and the human setting. We think it will give us a prediction in terms of how this molecule could ultimately perform in a clinical trial setting. In this study, we are going to run a set of studies. And across them, there are really going to be 3 key goals. First, we're going to assess the potential of NMRA-215 as a monotherapy treatment for obesity. And in this, it will just be an NMRA-215 dose in the mice. We really think that this could provide a value proposition as you relate to what's out there today in terms of the GLP-1 as well as the GLP therapies. We think that this molecule could offer the potential for incretin-like weight loss with better tolerability, and convenience as a small molecule, which can also result in a lower cost of goods as well. And so from a monotherapy perspective, we absolutely will be looking to show benefit there. We'll also be testing the product in combination as an add-on to a GLP-1 product. In this particular model, we will use semaglutide. It is known to be the standard GLP-1 used in the mouse DIO model. And so we will look at 215 as an add-on to semaglutide in this study, and ultimately to see can we with 215 reduce the level of semaglutide that is given and ultimately increase the weight loss and the tolerability. As we know in this population, there's been a range of studies out there, but we've seen anywhere from 60% to 70% of people taking the GLP-1s right now do not respond or ultimately discontinued due to lack of maximum weight loss. So we think that there's absolutely room to add big therapeutics on top of this. And then finally, one of the key questions is just the long-term durability of the existing therapy that we will be looking to test NMRA-215 as a maintenance treatment. And so you can think about this paradigm, Joe, as dosing both 215 and semaglutide combination to reach a level of weight loss and then removing the semaglutide dose ultimately to demonstrate that NMRA-215 can maintain the weight loss over a long-term period. And what this could really provide the market is a long-term cost-effective and tolerable option beyond the GLP-1 therapy today. So we're really excited to bring this program forward, Joe and really looking forward to providing the data from our DIO models as we move through the rest of 2025.

Your next question comes from the line of Paul Matteis of Stifel.

This is Matthew on for Paul. My question is on 861. Could you perhaps provide more description on what gives you confidence that this would be safer than the 266 molecule, which was also from the Vanderbilt deal?

Yes, absolutely. So Joe, this is Josh here. I'll take the question first, and then I'll pass it over to Nick to provide some specifics. I think, Joe, one of the things to really remember about our M4 franchise is that all of our compounds are structurally distinct. And so as we think about the convulsions that happened with 266, 861 and 898, which is our third M4 PAM that we announced today are all structurally distinct from one another. But Nick, maybe you can provide some added detail just on what gives us confidence on the safety of 861 as it relates to what we saw in 266 here.

Yes. Thanks, Josh. It's Nick here. Matthew, good question. So just stepping back, if you remember with 266, we had unfortunate and unexpected convulsions in rabbits. And really, as we brought these structurally distinct compounds forward, that was the main barrier for us to achieve. When you look at the basic pharmacology, our current corporate debt, the molecules are really good in 898. Critically, we've taken both those compounds into rabbit studies. We pushed doses and exposures which have exceeded where we saw convulsions with 266. So moving forward, we've truly de-risked 266 with both of these molecules. We feel like we're in a really good position now to push both these forward. And obviously, we're very excited to announce that we've started our Phase I study with 861 and more news will follow on 898.

Your next question comes from the line of Yatin Suneja of Guggenheim.

Exciting announcements today. Maybe just a couple on the KOASTAL program first, if I may. Any color on screen failure rate you can provide on the 2 studies or any parameters that might give you confidence that the site quality is good here. And then if you can also comment on the male to female ratio that you might be targeting or you might have enrolled so far. And then just a quick one on the 511. Obviously, those data are going to come relatively soon. So if you can maybe help us set expectation on what we should be expecting and what would be considered good for you to move forward?

Yatin, this is Bill. Good to speak with you again. We are really pleased with some of the benefits we're seeing from the measures we put into place with KOASTAL-2 and 3. As you'll recall, we took 3 steps when we paused the KOASTAL-1 study. Number one, we enhanced the medical monitoring. Second, we added in verified clinical trials. And third, we reduced the overall number of sites that we're participating in to focus on those that have more experience. So the first of these steps, which is enhancing the medical monitoring included partnering with MGH and the SAFR Group, CTNI. And we are seeing that, that independent verification of the diagnosis is helping to ensure that appropriate patients are being randomized. The VCT approach or verified clinical trials is a screening database that's helped us to ensure that the subjects being considered for the study aren't enrolled at a different site or in a trial that would serve as exclusionary, for example, in a TRD study. So that is also providing some added benefits. So we're pleased with what we are seeing with the measures we've put into place, and the trial is progressing in that regard. With respect to male to female ratio, I'll just simply state that we are seeing more females already enrolled relative to males in KOASTAL-2 and 3. I won't get into specifics today, but we are pleased to see that, that is, in fact, more consistent with the prevalence of MDD historically and what's been enrolled with sex distribution across the studies. Lastly, with respect to 511, as you'll recall, this is a signal-seeking study that is not powered to demonstrate statistical significance between active and placebo. Part A of the Phase Ib study was designed to evaluate the safety, tolerability, and the PK in healthy elderly participants. We completed Part A in 2024, and NMRA-511 was well tolerated in those participants. We've subsequently moved on to Part B and expect to have results towards the end of this year. Part B is designed to evaluate the safety, tolerability, efficacy in people with AD agitation. The primary endpoint is the change from baseline to week 8 on CMAI, although the study is not powered to show statistical significance. We believe the data will help us better understand the drug's effect in AD agitation, including the domains of agitation that it affects, and then we'll proceed with further steps around clinical development based on what we learned.

Your next question comes from the line of Douglas Tsao of H.C. Wainwright.

I'm just curious in terms of 215 and your thoughts on development in obesity. Obviously, this is a very competitive space. And once you get past the preclinical stage and even Phase I things start to become more expensive in terms of the studies. And obviously, as a CNS-focused company, obesity is maybe a little bit out of your primary focus. I'm just curious, is this something that you would want to take to a certain stage of development and accrue a certain amount of clinical data before potentially finding a partnership?

Yes, Doug, this is Josh, and I appreciate your question. Regarding our approach to the obesity indication at Neumora, we are dedicated to following the scientific evidence as we develop our pipeline. There is a growing body of research supporting the effectiveness of centrally-acting drugs for obesity treatment, including insights from GLP-1 therapies that demonstrate appetite suppression through central mechanisms. We believe that NLRP3 presents a unique method for treating obesity, distinct from incretins and other mechanisms currently in development. Numerous sponsors have generated preclinical data in the DIO model that reinforces the role of NLRP3 inhibition in obesity. As we assessed this opportunity, we recognized that it aligns perfectly with Neumora's mission to address significant health challenges at scale, leveraging our expertise in central action chemistry. Based on the data we shared today, we are confident that we have the leading NLRP3 inhibitor in terms of CNS penetration. While we won't comment on potential partnerships or whether we will advance the program independently at this time, I can confirm that our plans include progressing NMRA-215 through the DIO model and into Phase I, which is factored into our cash runway projections through 2027. Therefore, it is currently part of our operational strategy to move forward on our own. We are excited about today's announcement and look forward to sharing more preclinical data for NMRA-215 and our obesity program throughout the year.

Your next question comes from the line of Myles Minter of William Blair.

The first one is on 215. One of your peers that you listed as a molecule on Slide 28 in your presentation did have a diet-induced obesity model showing a 15% body weight decrease as a monotherapy. Just curious as your comment that efficacy is related to increasing brain exposure and your greater than twofold that compound according to your data. Are you expecting efficacy in that preclinical model to be greater than 15% weight loss in a monotherapy setting? That's the first question. Second question is, has your confidence in KOASTAL-2 or 3 changed at all since we've seen the VENTURA 1 and 2 trial data at ACNP believe those showed a 0.9 and 0.5 point improvement versus placebo on the MADRS, respectively. So just wondering whether views have changed since you've actually seen that data.

Myles, this is Josh. Regarding NMRA-215, we've closely examined the weight loss achieved by competitors using the DIO model. Currently, the progress shown by the NLRP3 inhibitor indicates a weight loss of approximately 10% to 15% with monotherapy, which we find quite compelling, especially considering the transition from mouse models to human applications. In comparison, semaglutide, a well-recognized GLP-1 compound, typically results in around 20% weight loss. While I won't provide exact figures for NMRA-215 in the DIO model at this time, we strongly believe that the potential of these molecules is linked to their central activity. The data we presented today shows that NMRA-215 has best-in-class brain exposure, suggesting we may present significant findings in the DIO model. As for your second question about confidence in KOASTAL-2 or -3 post-ACNP, our assurance in the study hasn't diminished since we announced the adjustments in March. I'll now pass it to Bill to elaborate on how these changes are playing out in the ongoing study.

This is Bill. As you'll recall, navacaprant is far more selective for kappa over mu opioid receptors. So there's a difference in pharmacology between navacaprant and aticaprant. And then, of course, ours is a monotherapy development program in contrast to the adjunctive setting. And so with those fundamental differences between the molecules and the program, we remain confident in our program, especially we've taken post K1 also are proving to be quite helpful with enhancing the medical monitoring and the application of the verified clinical trials database as well as having gone through the sites that are most experienced in MDD and having stopped those sites that have just less experience. And so things are progressing as planned, and we're on track for KOASTAL-3 in the first quarter and KOASTAL-2 in the second quarter of next year.

Your next question comes from the line of Ami Fadia of Needham.

Apologies if this is already asked. My question is regarding the 861 molecule. You mentioned earlier that it's obviously different from your earlier M4 PAM, but could you give us any color on any preclinical work that you may have done that gives you confidence around the safety profile?

Thanks, Ami, this is Josh. What I'll start off by mentioning is that just a reminder, all of our M4 PAMs are structurally distinct from one another, including 266, 861, and 898. But I'll turn this over to Nick right now to provide some more specifics on your question on the 861 safety profile.

Ami, Nick. I think the critical preclinical information we have is what we did in vivo in the rabbit. As you recall, it was unexpected in the rabbit, which was on clinical hold with that molecule. We've done a lot of work in the last 12 months with 861 and 898 in the rabbit where we've taken and we've dosed those compounds and achieved exposures which surpassed where we were with 266, and we've not seen any evidence of any convulsions. We feel very confident we have de-risked both molecules as we move forward alongside the really encouraging overall pharmacological profile and other data we have, we're really encouraged about moving both of them forward. And as I mentioned earlier, we're really excited about having 861 back in Phase I clinical development.

Your next question comes from the line of JPMorgan.

This is Miriam on for Tess. What synergies do you see between your existing neuro-focused pipeline and obesity? And along these lines, how did you come about deciding that this is the right next indication for Neumora? And can you help us reconcile what your cash runway does and does not include in terms of R&D initiatives?

Great. This is Josh, and I'll take the question. As I mentioned before, we are committed to following the science and the increasing evidence that the drugs we are developing to treat obesity are effective through central mechanisms. We believe that obesity is a clear fit with our mission to introduce novel mechanisms and approaches to patients dealing with significant health disorders influenced by central mechanisms. Thus, we see NMRA-215 for obesity as an opportunity to create a potentially best-in-class therapeutic for this area. There are considerable synergies based on our team's expertise in designing and developing molecules that effectively penetrate the brain, which is key for unlocking the potential of this class and target. Regarding our cash runway, I want to emphasize that we have a solid cash balance, with approximately $217 million on our balance sheet at the end of the second quarter. This provides us with funding into 2027, fully supporting all our critical programs as we have publicly outlined through the clinical stages. We believe that for each of our most advanced programs, we will achieve significant clinical milestones within the current cash runway period. We're excited about what lies ahead and the chance to bring six potential clinical catalysts to patients over the next 18 months.

Thanks, operator, and thank you again to everyone for joining us this afternoon. So as you can see, this is an exciting time at Neumora with up to 6 distinct catalysts anticipated over the next 18 months, each serving as a critical inflection point with the potential to create significant value across our portfolio. These include preclinical data with NMRA-215 in obesity and the initiation of clinical studies with this program. Initial clinical data from NMRA-861 in schizophrenia, the Phase Ib data in Alzheimer's disease agitation, and Phase III data from navacaprant in the KOASTAL program. We are well positioned to achieve all upcoming milestones, which reflect the strength of our pipeline and caliber of our execution. But most importantly, it reflects our commitment to the millions of people who are in need of better treatment options. We are working with urgency to bring forward the next generation of novel therapies and ultimately redefine drug development in neuroscience. So thank you again for your continued support, and that concludes our call this afternoon.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.