Minerva Neurosciences, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. The company is a clinical-stage biopharmaceutical developer focused on CNS disorders, with roluperidone for schizophrenia and MIN-301 for Parkinson’s disease. It has no approved products and reported no product revenue.
Financial results and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $4.1 million | $5.5 million | $9.1 million | $8.8 million |
| General and administrative expense | $2.8 million | $3.4 million | $5.9 million | $7.7 million |
| Net loss | $8.7 million | $10.6 million | $18.5 million | $19.4 million |
| Net loss per share | $1.63 | $1.98 | $3.46 | $3.63 |
| Cash used in operating activities | Not provided for quarter | Not provided for quarter | $11.0 million | $11.1 million |
- Cash, cash equivalents and restricted cash totaled $49.9 million at June 30, 2022, down from $60.9 million at December 31, 2021. Management said available cash should cover commitments for at least 12 months after the financial statements were issued, but additional capital will be needed to fund ongoing operations and later-stage development.
- Current assets were $50.0 million and current liabilities $3.4 million. Total liabilities were $73.3 million, including a $69.9 million liability from the sale of future seltorexant royalties. The royalty liability includes $9.9 million of accumulated non-cash interest; it is not conventional term-loan debt.
- Stockholders’ equity was negative $8.4 million, compared with positive $8.0 million at year-end 2021. Accumulated deficit was $353.2 million.
- No financing proceeds were received in the first half of 2022. Operating cash use was partly offset by non-cash royalty-related interest expense and stock-based compensation. In the first half of 2021, the company received $60 million from the royalty sale.
Material changes versus prior comparable periods
- Q2 research and development expense declined by about $1.4 million, primarily because the roluperidone Phase 3 open-label extension had been completed in May 2021. First-half R&D expense increased by about $0.3 million as higher NDA-support consulting costs offset lower trial costs.
- General and administrative expense declined by about $0.6 million in Q2 and $1.8 million for the first half, mainly due to lower staffing-related, stock-compensation, legal and insurance costs.
- Net loss improved year over year in both comparison periods. First-half cash used in operations was broadly similar to the prior year.
- A one-for-eight reverse stock split became effective June 17, 2022. Shares outstanding fell from 42.7 million pre-split to 5.34 million post-split; all share and per-share figures in the filing are retrospectively adjusted.
Outlook, management commentary and risks
- At a March 2022 Type C meeting, FDA reiterated substantial concerns about whether existing roluperidone studies support an NDA, including Phase 3 efficacy results, post hoc analyses, applicability to U.S. patients, and identifying and monitoring patients who do not need antipsychotics. FDA noted that the Phase 3 study remained negative overall; the 64 mg dose had a nominal p-value of 0.044 after excluding a site with data-integrity concerns, while the 32 mg dose did not meet the required significance criterion.
- FDA suggested additional data could address its concerns and could be collected alongside preparation for a potential application. The company said it continued preparing for a possible roluperidone NDA submission in Q3 2022, subject to timing and FDA feedback. This was a company plan, not an FDA endorsement or assurance of filing acceptance or approval.
- Management expects continuing operating losses and negative operating cash flow. Clinical-trial timing and cost, regulatory requirements, and access to capital could change spending needs. If additional financing is unavailable on acceptable terms, the company may have to scale back or discontinue operations or development programs.
- The company stated that stockholders’ equity did not meet Nasdaq’s $10 million continued-listing requirement, and it had an extension through September 5, 2022 to regain compliance. It reported that Nasdaq confirmed minimum-bid-price compliance on July 6 after the reverse split. Failure to demonstrate equity compliance could put the listing at risk and impair access to capital.
- Other cited risks include clinical and regulatory uncertainty, COVID-19 effects on trials and capital markets, cybersecurity and data privacy exposures, and foreign-operation and currency risks. The filing reported no legal proceeding or claim expected to have a material adverse effect.
Important facts for investors to verify
- Whether Minerva filed the roluperidone NDA, and the subsequent FDA position on filing, review, and any additional data requirements.
- Whether the company met Nasdaq’s stockholders’ equity requirement by the applicable deadline and maintained continued-listing compliance.
- Actual cash burn and financing needs relative to the stated 12-month runway, including any changes in clinical plans or expenditures.
- Progress of Janssen’s seltorexant program and any resulting milestone payments; the $95 million potential milestone amount is contingent, not guaranteed.
- Changes in the estimated royalty-obligation interest rate and liability, which depend on assumptions about future royalty timing and amounts.