Frederick W. Ahlholm; Senior VP, CFO & Secretary; Minerva Neurosciences, Inc.
Geoffrey Robin Race; President; Minerva Neurosciences, Inc.
Remy Luthringer; Executive Chairman & CEO; Minerva Neurosciences, Inc.
Douglas Dylan Tsao; MD & Senior Healthcare Analyst; H.C. Wainwright & Co, LLC, Research Division
Lin Tsai; Equity Analyst; Jefferies LLC, Research Division
Welcome to the Minerva Neurosciences First Quarter 2023 Conference Call. (Operator Instructions) 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 call over to Geoff Race, President of Minerva Neurosciences. Please go ahead.
Geoffrey Robin Race
Good morning. A press release with the company's first quarter 2023 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; and Mr. Fred Ahlholm, Senior Vice President and Chief Financial 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 31st of March 2023 filed with the SEC earlier today.
Any forward-looking statements made on this call speak only as of today's date, Monday, the 15th of May 2023. 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, Geoff, and good morning, everyone. Thank you for joining us today. I would like to begin with the great news about our roluperidone program. We received confirmation on the 27th of April from the FDA that our NDA was filed and on the 8th of May, we received confirmation that the review will proceed on a standard review timeline with a PDUFA goal date of February 26, 2024.
At this time, the FDA stated that it is not planning to hold an advisory committee. The FDA also noted that they had identified as potential review issues, those issues already cited in the FDA's refusal to file letter and communicated in the Type C meeting in March 2022, which I will discuss in a moment. Roluperidone has a novel mechanism of action in a new indication, and this has not been a straightforward filing process. So let me provide you with some additional insight in our recent interactions with the agency.
Negative symptoms of schizophrenia are notoriously difficult to treat and as Dr. Harvey commented following the filing of our NDA, an approved treatment for negative symptoms could revolutionize the treatment of schizophrenia. This is underscored by the lack of any approved drugs in the U.S. to treat these symptoms. And to the best of my knowledge, there are no drugs currently in development that have a specific and direct benefit on negative symptoms of schizophrenia and very importantly, that translate into a functional improvement in patients.
While other drugs in development may reduce negative symptoms as a consequence of improving positive symptoms and those related to the side effect of antipsychotics, none have been shown to be effective directly and specifically on disease-related negative symptoms. Furthermore, our 2 late-stage studies have shown that improvement in the measures of negative symptoms translates into an improvement of daily functioning. Again, to the best of my knowledge, roluperidone is the only drug that has shown both improvement of disease-related negative symptoms and as a consequence, daily functional ameliorations in patients.
Last but not least, it is well documented in the scientific literature that antipsychotic drugs that block dopaminergic pathways in the brain may cause drug-related worsening of negative symptoms beyond the negative symptoms that are disease related. Roluperidone, in monotherapy, is intended to treat specifically those negative symptoms that are disease-related in a well-identified patient subpopulation which isn't prone to relapse as has been demonstrated in both of our late-stage clinical trials.
While we intend for roluperidone to be prescribed as a monotherapy, one of the issues FDA raised is its potential use by patients on antipsychotics. When we began roluperidone's clinical development, we deliberately chose to position roluperidone as a monotherapy. We chose this approach based on both KOL feedback and my personal experience in clinical practice, that highlighted an important underserved population. The substantial number of patients that diagnosed with schizophrenia who do not need continuous antipsychotic drug therapy to manage the positive symptoms, but whose negative symptoms render them incapable of living normal lives.
As previously mentioned, these are the patients that we recruited and studied in our clinical trials. We estimate that around 60% to 70% of patients diagnosed with schizophrenia suffer from moderate to severe negative symptoms. Of those, a significant number do not require antipsychotics to control and stabilize the positive symptoms. Supported by data from our Phase IIb and Phase III studies that included this well-defined group of patients, we submitted our NDA, seeking the approval of 64-milligram of roluperidone. We believe that these trials were adequate and well controlled for the proposals of submitting an NDA. The overall data set included results from 2 doses, 32-milligram and 64 milligram. Each study was placebo-controlled and included a 12-week double-blind period comparing monotherapy roluperidone to placebo.
Also included were the data from the 6 months open-label extension phase of the Phase IIb study and data from the 9 months open label extension of the Phase III study. The Phase IIb study was positive and met the primary endpoint as well as most of the secondary and exploratory endpoints for both doses. The Phase III study achieved a nominal p-value of 0.044 on the primary endpoint for 64-milligram but did not reach statistical significance for 32 milligram. The p-values are only nominal p-values due to the fact that the type 1 error correction used in the trial requires that at a, that both doses must show a p-value below 0.05 to declare a positive study or a single dose must show a p-value below 0.025 to declare a positive finding in that dose arm only, and this was not achieved. So key secondary endpoint measuring daily functioning PSP showed nominally statistically significant severity of roluperidone compared to placebo at both doses.
One final point regarding our studies that is worth mentioning, which FDA has raised as a potential issue, and which we have discussed extensively with the FDA is the countries in which our studies were conducted. We enrolled the Phase IIb study exclusively in Europe while the Phase III study included patients from both the U.S. and Europe. Schizophrenia as a disease does not vary from country to country, patients demonstrate the same symptoms and are treated with the same drugs irrespective of where they live.
The U.S. patients and European patients in our Phase III study had virtually identical baseline symptom scores and had comparable responses to roluperidone as measured by both the primary and the key secondary end points throughout the study. I would like to personally thank the FDA for the opportunity to have our NDA review, and we look forward to continuing to work with the agency to address their questions. It's critical for many reasons we have discussed here today that we find an effective and safe treatment for patients with negative symptoms of schizophrenia. Thank you.
I will continue to update all of Minerva's stakeholders of our progress in the coming months. I will now turn it over to Fred for the financial update.
Frederick W. Ahlholm
Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the first quarter ended March 31, 2023. 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 as of March 31, 2023, and were approximately $36.1 million as compared to $36.2 million as of December 31, 2022. In January 2023, we received a refund from the FDA of the $3.1 million filing fee for our NDA for roluperidone. This refund was made in accordance with the Federal Food, Drug and Cosmetic Act which allows for a fee waiver for a small business, submitting its first human drug application. We expect the company's existing cash and cash equivalents will be sufficient to meet its anticipated capital requirements for at least the next 12 months based on our current operating plan. The assumptions upon which this estimate are based are routinely evaluated and may be subject to change.
For the 3 months ended March 31, 2023 and 2022, research and development expense was $2.7 million and $5 million, respectively, a decrease of $2.3 million. The decrease in R&D expense was primarily due to lower noncash stock compensation costs and lower consultant fees related to our NDA, which was submitted in the third quarter of 2022. For the 3 months ended March 31, 2023 and 2022, noncash stock compensation costs included in R&D expense was $0.2 million and $0.5 million, respectively.
For the 3 months ended March 31, 2023, and 2022, general and administrative expense was $2.7 million and $3 million, respectively, a decrease of $0.3 million. The decrease in G&A expense was primarily due to noncash stock compensation. For the 3 months ended March 31, 2023 and 2022, noncash stock compensation costs included within G&A expense was $0.2 million and $0.6 million, respectively.
For the 3 months ended March 31, 2023 and 2022. We recognized noncash interest expense of $2 million and $1.8 million, respectively, an increase of $0.2 million. The increase was primarily due to an increase in the carrying value of the liability related to the sale of future royalties for seltorexant to Royalty Pharma for which upfront milestone payments are being amortized under the interest method over the estimated life of the agreement.
Net loss was approximately $7 million for the first quarter of 2023 or a net loss per share of $1.31 basic and diluted, as compared to net loss of approximately $9.8 million or a net loss per share of $1.83 basic and diluted for the first quarter of 2022.
Now I'd like to turn the call over to the operator for any questions. Operator?
Question and Answer Session
(Operator Instructions) Our first question comes from Andrew Tsai with Jefferies.
So the first question is, it's clearly an interesting turn of events. So naturally, my question is, what do you think exactly drove the FDA to grant this appeal in favor of you guys? Is there something new -- someone new at the FDA reviewing your application? Or did the agency receive some more information from you? What exactly happened?
Andrew, Remy speaking. So I think what happens is that when we went for this formal dispute resolution request, as you know, you have to provide with an additional briefing book. And you have to detail why you think that your NDA is having all the information needed for a review, yes.
And I think because we had the chance to have a face-to-face meeting, and to have the attention of the people from the FDA attending the meeting, I think they came to the same conclusion as we are coming, which is that this, how to say, data set we have in our NDA, it needs really an in-depth review, yes. And as you know, this is only possible when the FDA starts to really look to the data. So long story short, no new data have been added. It was just a matter of re-explaining what is in the NDA and to have the attention from the person from the FDA.
Very clear and I think in your prepared remarks, maybe in your day 74 ladder, it sounded like the FDA told you they did not plan to host an ad comm. Does this development surprise you in any way?
It's a good question. But I mean, what they mentioned is at this stage of the review, yes. So obviously, this can evolve, yes. But is it surprising us? I don't think so. I think we really have to now to start the dialogue with the FDA or to continue the dialogue because I think the dialogue not really engaged and provide all the answers as the FDA might have.
And hopefully, after 10 months of review, I mean, we will get the drug approved. And again, if I mean, I think the FDA decides, I mean, it needs an outcome. They will probably tell us later during the process of review, but no surprise, just we are focused on providing all the necessary information to the FDA during the course of review.
And then very last one is maybe for Fred. How are you thinking about a potential launch in 2024? What is the company's strategy, would you market roluperidone by yourselves? Or would you seek a partner? And do you think you would start hiring sales reps in this year? Or would you rather wait until the actual approval decision later in 2024?
Frederick W. Ahlholm
Thank you. Good question. We think about how this is going to evolve over time and certainly, something of this size would require most likely some systems. So something that we consider as a partner, a type of partner that makes sense for us. And -- but one step at a time. So we're -- while we look to see what our needs would be in order to be able to launch sooner than later, we're still evaluating that at this time.
We have a question from Douglas Tsao with H.C. Wainwright.
Douglas Dylan Tsao
Can you remind us, I believe, in some of the interactions you've had with the FDA leading into the NDA filing. They had identified some other issues besides the conduct of the Phase II, III study. Can you remind us, have those all been resolved or were some of those identified as issues that the agency needed to consider during the review process?
No. So, good question. But -- so what we have done, I mean, during this meeting we had with the FDA, we really addressed in our presentation, all the issues which have been raised by the FDA. And I think the consequence is that they filed our NDA. So probably, we addressed most of the topics which were raised.
But as you know, I mean, now we are at a review of the NDA and now we are going to the in-depth review of the different parts of the NDA, yes. So no, we will have, as I said before, back and forth in terms of questions. I am very confident that we will be able to address the questions they might have or a more in-depth review of some of the topics they already raised. But I think it's fair to say that we were probably able to show at minimum to the FDA that it is important to review this NDA and to go into the details of the different topics assuming -- but no new topics, just, I think, a re-explanation, a reassessment of the different topics raised and this led to the filing.
Douglas Dylan Tsao
And then can you just remind us for seltorexant, what remaining economics you may be entitled to or might be eligible to receive?
I think this is for Geoff.
Geoffrey Robin Race
Yes. Thanks for the question, Doug. So we have approximately $95 million left in terms of the milestones in the agreement that we signed with Royalty Pharma. There's a $10 million milestone, which is dependent on the Phase III clinical study. And then there's approximately $60 million related to regulatory approval in various different geographies.
Douglas Dylan Tsao
And the -- and then the rest would be commercial -- related to commercial?
Geoffrey Robin Race
Thank you. And I'm showing no further questions. I'd like to turn the call back to Remy Luthringer for closing remarks.
Yes. Thank you so much. Thank you all for being with us today. And so I think it is a very, very important event which happens as the FDA filed our NDA. Keep in mind that this is the first drug seeking to improve negative symptoms in patients suffering from schizophrenia, which has been filed. So really, I think this is raising a lot of hope for patients and families in need of better treatment because there is no approved treatment for negative symptoms currently approved in the U.S.
I wanted also thank again for the time and the listening from the FDA during the meeting we had with them recently, which led to the filing of our NDA. And I'm really looking forward to the exchange with psychotic division in order to really move forward and hopefully go to an approval of roluperidone.
Thank you again, and we will keep you updated when we are moving along and each time news are coming to us. Thank you so much, and have a good day.
This concludes today's conference call. Thank you for participating. You may now disconnect.