UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to .
Commission File No.
(Exact Name of Registrant as Specified in its Charter)
|
||
(State or Other Jurisdiction of |
|
(I.R.S. Employer |
|
|
|
|
||
(Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
Accelerated filer |
|
☐ |
|
|
|
|
|||
|
☒ |
|
Smaller reporting company |
|
||
|
|
|
|
|
|
|
Emerging growth company |
|
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The number of shares of Registrant’s Common Stock, $0.0001 par value per share, outstanding as of November 2, 2023 was
INDEX TO FORM 10-Q
|
|
|
|
Page |
|
|
|
|
|
|
|
|
|
|
Item 1. |
|
|
4 |
|
|
|
Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 |
|
4 |
|
|
|
5 |
|
|
|
|
6 |
|
|
|
|
7 |
|
|
|
|
8 |
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
16 |
Item 3. |
|
|
23 |
|
Item 4. |
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 1. |
|
|
25 |
|
Item 1A. |
|
|
25 |
|
Item 2. |
|
|
38 |
|
Item 3. |
|
|
39 |
|
Item 4. |
|
|
39 |
|
Item 5. |
|
|
39 |
|
Item 6. |
|
|
40 |
|
|
|
|
|
|
|
41 |
|||
2
Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q, or Quarterly Report, to “Minerva,” “the Company,” “we,” “us,” and “our” refer to Minerva Neurosciences, Inc. and, where appropriate, its subsidiaries.
This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements reflect our plans, estimates and beliefs. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not transpire. These risks and uncertainties include, but are not limited to, the risks included in this Quarterly Report on Form 10-Q under Part II, Item IA, “Risk Factors” and in our Annual Report on Form 10-K for the year ended December 31, 2022 under Part I, Item IA, “Risk Factors.”
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this document. You should read this document with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.
All trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.
3
PART I – Financial Information
Item 1 – Financial Statements
MINERVA NEUROSCIENCES, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
|
September 30, |
|
|
December 31, |
|
||
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
||
Current assets |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
||
Refundable regulatory fee |
|
— |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
||
|
|
|
|
|
|
||
Equipment, net |
|
|
|
|
|
||
Capitalized software, net |
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
||
Total assets |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Liabilities and Stockholders’ (Deficit) Equity |
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
||
Accounts payable |
$ |
|
|
$ |
|
||
Accrued expenses and other current liabilities |
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
||
Liability related to the sale of future royalties |
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
||
|
|
|
|
|
|||
|
|
|
|
|
|
||
Stockholders’ (deficit) equity |
|
|
|
|
|
||
Preferred stock; $ |
|
|
|
|
|
||
Common stock; $ |
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
||
Accumulated deficit |
|
( |
) |
|
|
( |
) |
Total stockholders’ (deficit) equity |
|
( |
) |
|
|
( |
) |
Total liabilities and stockholders’ (deficit) equity |
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements
4
MINERVA NEUROSCIENCES, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
||||
Total expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange (losses) gains |
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Investment income |
|
|
|
|
|
|
|
|
|
|
|
||||
Non-cash interest expense for the sale of future royalties |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share, basic and diluted |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
||||
See accompanying notes to condensed consolidated financial statements.
5
MINERVA NEUROSCIENCES, INC.
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
(Unaudited)
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
|
|
||||||||
|
Shares |
|
|
Amount |
|
|
Paid-In Capital |
|
|
Deficit |
|
|
Total |
|
|||||
Balances at January 1, 2022 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances at March 31, 2022 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Adjustments due to the rounding impact from the reverse stock split for fractional shares |
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances at June 30, 2022 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances at September 30, 2022 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balances at January 1, 2023 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances at March 31, 2023 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Issuance of common stock and warrants pursuant to a private placement |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Costs related to issuance of common stock and warrants |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Vesting of performance-based restricted stock units |
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances at June 30, 2023 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Costs related to issuance of common stock and warrants |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances at September 30, 2023 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
See accompanying notes to condensed consolidated financial statements.
6
MINERVA NEUROSCIENCES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
Nine Months Ended September 30, |
|
|||||
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net loss |
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
— |
|
|
Amortization of capitalized software |
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
||
Non-cash interest expense associated with the sale of future royalties |
|
|
|
|
|
||
Changes in operating assets and liabilities |
|
|
|
|
|
||
Refundable regulatory fee |
|
|
|
|
( |
) |
|
Prepaid expenses and other current assets |
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
( |
) |
|
Accrued expenses and other current liabilities |
|
|
|
|
|
||
Net cash used in operating activities |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
||
Net cash provided by investing activities |
|
|
|
|
|
||
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
||
Proceeds from sales of common stock and warrants in private placement |
|
|
|
|
— |
|
|
Costs paid in connection with private placements |
|
( |
) |
|
|
— |
|
Fees paid in connection with the reverse stock split fractional shares |
|
— |
|
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
( |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash |
|
|
|
|
|
||
Beginning of period |
|
|
|
|
|
||
End of period |
$ |
|
|
$ |
|
||
Reconciliation of the Condensed Consolidated Statements of Cash Flows to the |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
7
MINERVA NEUROSCIENCES, INC.
Notes to Condensed Consolidated Financial Statements
As of September 30, 2023 and for the Nine Months Ended September 30, 2023 and 2022
(Unaudited)
NOTE 1 — NATURE OF OPERATIONS AND LIQUIDITY
Nature of Operations
Minerva Neurosciences, Inc. (“Minerva” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of product candidates to treat patients suffering from central nervous system diseases. The Company’s lead product candidate is roluperidone (f/k/a MIN-101), a compound the Company is developing for the treatment of negative symptoms in patients with schizophrenia. The Company holds the license to roluperidone from Mitsubishi Tanabe Pharma Corporation (“MTPC”) with the rights to develop, sell and import roluperidone globally, excluding most of Asia. In August 2022, the Company submitted a New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) for its lead product candidate, roluperidone, for the treatment of negative symptoms in schizophrenia. In October 2022, the Company received a refusal to file letter (“RTF”) from the FDA for the NDA for roluperidone. Subsequently, the Company requested a formal dispute resolution and appealed the RTF, following which, on April 27, 2023, the FDA filed the Company’s NDA for roluperidone. In May 2023, the FDA confirmed that the NDA for roluperidone was assigned a standard review classification and a Prescription Drug User Fee Act goal date of February 26, 2024. The FDA advised that it identified potential review issues that had been previously cited in the RTF decision letter, which included those discussed at the Type C meeting in March 2022. See the section titled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Clinical and Regulatory Updates—Type C Meeting” for more information.
The Company has exclusive rights to develop and commercialize MIN-301, a compound for the treatment of Parkinson’s disease. In addition, Minerva previously co-developed seltorexant (f/k/a MIN-202 or JNJ-42847922) with Janssen Pharmaceutica NV (“Janssen”) for the treatment of insomnia disorder and adjunctive treatment of Major Depressive Disorder (“MDD”). During 2020, Minerva exercised its right to opt out of the joint development agreement with Janssen for the future development of seltorexant. As a result, the Company was entitled to collect royalties in the mid-single digits on potential future worldwide sales of seltorexant in certain indications, with no further financial obligations to Janssen. In January 2021, the Company sold its rights to these potential royalties to Royalty Pharma plc (“Royalty Pharma”) for a $
Liquidity
The accompanying interim condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has limited capital resources and has incurred recurring operating losses and negative cash flows from operations since inception. As of September 30, 2023, the Company had an accumulated deficit of approximately $
As of September 30, 2023, the Company had cash, cash equivalents, and restricted cash of $
The Company will need to raise additional capital to continue to fund operations and fully fund any potential later stage clinical development programs. The Company believes that it will be able to obtain additional working capital through equity financings or other arrangements to fund future operations; however, there can be no assurance that such additional financing, if available, can be obtained on terms acceptable to the Company. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued.
8
Further, if the Company does not satisfy The Nasdaq Capital Market continued listing requirements, its common stock may be subject to delisting, which could impact the Company’s ability to complete additional equity financings on terms acceptable to the Company.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and the requirements of the Securities and Exchange Commission (“SEC”) in accordance with Regulation S-X, Rule 8-03. Under those rules, certain notes and financial information that are normally required for annual financial statements can be condensed or omitted. In the opinion of the Company’s management, the accompanying financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of September 30, 2023, the results of operations for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year. The consolidated balance sheet as of December 31, 2022 was derived from the audited annual financial statements. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2023.
Reverse Stock Split
On June 17, 2022, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effect a one-for-eight (1-for-8) reverse stock split of its outstanding common stock. The Amendment became effective at 5:00 p.m. Eastern Time on June 17, 2022. A series of alternate amendments to effect a reverse stock split was approved by the Company’s stockholders at the Company’s 2022 Annual Meeting of Stockholders on June 10, 2022, and the specific one-for-eight (1-for-8) reverse stock split was subsequently approved by the Company’s board of directors on June 10, 2022.
The Amendment provided that, at the effective time of the Amendment, every eight (8) shares of the Company’s issued and outstanding common stock automatically combined into one issued and outstanding share of common stock, without any change in par value per share. The reverse stock split affected all shares of the Company’s common stock outstanding immediately prior to the effective time of the Amendment. As a result of the reverse stock split, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units and restricted stock awards issued by the Company and outstanding immediately prior to the effective time of the Amendment, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and restricted stock awards, and, in the case of stock options, a proportionate increase in the exercise price of all such stock options. In addition, the number of shares reserved for issuance under the Company’s equity compensation plans immediately prior to the effective time of the Amendment was reduced proportionately. The reverse stock split did not affect the number of shares of common stock authorized for issuance under the Company’s Amended and Restated Certificate of Incorporation, which remained at
No fractional shares were issued as a result of the reverse stock split. Stockholders of record who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof. The reverse stock split affected all stockholders proportionately and did not affect any stockholder’s percentage ownership of the Company’s common stock (except to the extent that the reverse stock split results in any stockholder owning only a fractional share). As a result of the reverse stock split, the number of the Company’s outstanding shares of common stock as of June 17, 2022 decreased from
All share and per share amounts in the accompanying financial statements, related footnotes, and management’s discussion and analysis have been adjusted retroactively to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.
Consolidation
The accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries, Mind-NRG Sarl and Minerva Neurosciences Securities Corporation. Intercompany transactions have been eliminated.
9
Significant risks and uncertainties
The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital.
The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
Cash equivalents include short-term, highly-liquid instruments, consisting of money market accounts and short-term investments with maturities from the date of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand which reduces counterparty performance risk.
Restricted cash
Cash accounts with any type of restriction are classified as restricted. The Company maintained restricted cash balances as collateral for corporate credit cards in the amount of $
Refundable regulatory fee
On August 12, 2022, the Company paid $
Recent accounting pronouncements
NOTE 3 — ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consist of the following:
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||
Research and development costs and other accrued expenses |
$ |
|
|
$ |
|
||
Accrued bonus |
|
|
|
|
|
||
Professional fees |
|
|
|
|
|
||
Vacation pay |
|
|
|
|
— |
|
|
Accrued expenses and other current liabilities |
$ |
|
|
$ |
|
||
10
NOTE 4 — NET LOSS PER SHARE OF COMMON STOCK
Diluted loss per share is the same as basic loss per share for all periods presented as the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive.
In June 2023, in connection with the Private Placement (as defined and described in Note 6, Stockholders’ Equity), the Company issued and sold pre-funded warrants exercisable for an aggregate of
The following table sets forth the computation of basic and diluted loss per share for common stockholders:
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average shares of common stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share of common stock – basic and diluted |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following securities outstanding at September 30, 2023 and 2022 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of loss per share is antidilutive:
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Common stock options |
|
|
|
|
|
|
|
|
|
|
|
||||
Performance-based restricted stock units (“PRSUs”) |
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock warrants |
|
|
|
|
|
|
|
|
|
|
|
||||
In April 2023, the Compensation Committee of the Company’s board of directors certified the achievement of a performance condition occurring upon FDA acceptance of the NDA for roluperidone. As a result,
NOTE 5 — SALE OF FUTURE ROYALTIES
The Company had previously co-developed seltorexant with Janssen for the treatment of insomnia disorder and adjunctive treatment of MDD. During 2020, the Company exercised its right to opt out of the joint development agreement with Janssen for the future development of seltorexant and, as a result, the Company was entitled to collect royalties in the mid-single digits on potential future sales of seltorexant worldwide in certain indications, with no further financial obligations to Janssen.
On January 19, 2021, the Company entered into an agreement with Royalty Pharma under which Royalty Pharma acquired the Company’s royalty interest in seltorexant for an upfront payment of $
11
As royalties are remitted from Janssen to Royalty Pharma, the balance of the Royalty Obligation will be effectively repaid over the life of the co-development and license agreement (the “Agreement”) with Janssen. In order to determine the amortization of the Royalty Obligation, the Company is required to estimate the total amount of future royalty payments to Royalty Pharma over the life of the Agreement. In addition to the $
The following table shows the activity of the Royalty Obligation since the transaction inception through September 30, 2023:
|
September 30, 2023 |
|
|
Upfront payment from the sale of future royalties |
$ |
|
|
Non-cash interest expense associated with the sale of future royalties |
|
|
|
Liability related to the sale of future royalties |
$ |
|
|
NOTE 6 — STOCKHOLDERS’ EQUITY
Private Placement of Common Stock and Warrants
On
The pre-funded warrants issued in the Private Placement provide that a holder of the pre-funded warrants will not have the right to exercise any portion of its pre-funded warrants to the extent such holder, together with its affiliates, after giving effect to such exercise, would beneficially own in excess of the beneficial ownership limitation, as elected by such Investor, immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that each pre-funded warrant holder may increase or decrease the Beneficial Ownership Limitation by giving
On June 30, 2023, the Private Placement closed and the Company received aggregate gross proceeds from the Private Placement of $
12
Pursuant to the Securities Purchase Agreement, the Company filed a registration statement on Form S-3 (File No. 333-273686), which was declared effective by the SEC on August 9, 2023, covering the resale of the Registrable Securities (as such term is defined in the Securities Purchase Agreement). The Company has agreed to use its commercially reasonable efforts to keep such registration statement effective until the earlier of (i) the third anniversary of the effective date of the initial registration statement covering the Registrable Securities; (ii) the date all Shares and all shares of common stock underlying the pre-funded warrants may be sold under Rule 144 of the Securities Act of 1933, as amended, without being subject to any volume, manner of sale or publicly available information requirements; or (iii) immediately prior to the closing of a Change of Control (as such term is defined in the Securities Purchase Agreement).
Pursuant to the Securities Purchase Agreement, in connection with the Private Placement, Boehringer Ingelheim International GmbH (“BI”), an Investor in the Private Placement, has the right to designate an observer to attend, subject to certain exceptions, meetings of the Company’s board of directors and its committees, until the earlier of (i) the occurrence of a Change of Control and (ii) the date that it and its affiliates collectively hold less than
At-the-Market Equity Offering Program
In , the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) pursuant to which the Company may offer and sell, from time to time, through Jefferies shares of the Company’s common stock, by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. During the nine months ended September 30, 2023,
Term Loan Warrants
In connection with the Company’s former Loan and Security Agreement with Oxford Finance LLC and Silicon Valley Bank (the “Lenders”), which provided for term loans to the Company in an aggregate principal amount of up to $
NOTE 7 — STOCK AWARD PLAN AND STOCK-BASED COMPENSATION
In December 2013, the Company adopted the 2013 Equity Incentive Plan (as subsequently amended and restated, the “Plan”), which provides for the issuance of options, stock appreciation rights, stock awards and stock units.
Stock Option Awards
Stock option activity for employees and non-employees for the nine months ended September 30, 2023 is as follows:
|
|
Shares |
|
|
Weighted- |
|
|
Weighted- |
|
|
Total |
|
||||
Outstanding January 1, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Granted |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exercised |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Outstanding September 30, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable September 30, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Available for future grant |
|
|
|
|
|
|
|
|
|
|
|
|
||||
13
The weighted average grant-date fair value of stock options outstanding on September 30, 2023 was $
The expected term of the employee-related options was estimated using the “simplified” method as defined by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment. The volatility assumption was determined by examining the historical volatility of the Company and volatilities for industry peer companies. The risk-free interest rate assumption is based on the U.S. Treasury instruments, the term of which was consistent with the expected term of the options. The dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed
The Company uses the Black-Scholes model to estimate the fair value of stock options granted. For stock options granted during the nine months ended September 30, 2023 and 2022, the Company utilized the following assumptions:
|
|
Nine Months Ended |
||
|
|
September 30, 2023 |
|
September 30, 2022 |
Expected term (years) |
|
|
||
Risk free interest rate |
|
|
||
Volatility |
|
|
||
Dividend yield |
|
|
||
Weighted average grant date fair value per share of common stock |
|
$ |
|
$ |
Performance-Based Restricted Stock Units
On August 6, 2021, options to purchase
The Company used the pre-modification stock options for determining the compensation cost related to the PRSUs as the vesting conditions remain uncertain for the outstanding PRSUs. The total unrecognized compensation cost related to non-vested stock options at September 30, 2023 was approximately $
On April 28, 2023, the Compensation Committee of the Company’s board of directors certified the achievement of a performance condition occurring upon FDA acceptance of the NDA for roluperidone. As a result,
The following table presents stock-based compensation expense included in the Company’s consolidated statements of operations:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
14
NOTE 8 — COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of the Company’s business activities. The Company is not aware of any claim or litigation, the outcome of which, if determined adversely to the Company, would have a material effect on the Company’s financial position or results of operations.
Leases
On October 11, 2022, the Company entered into an office lease agreement with Regus to lease approximately
15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our annual audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on March 8, 2023. This discussion and analysis contains forward-looking statements that involve significant risks and uncertainties. Our actual results, performance or experience could differ materially from what is indicated by any forward-looking statement due to various important factors, risks and uncertainties, including, but not limited to, those set forth under “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.
Overview
We are a clinical-stage biopharmaceutical company focused on the development and commercialization of proprietary product candidates to treat patients suffering from central nervous system diseases. Leveraging our scientific insights and clinical experience, we have acquired or in-licensed compounds that we believe have innovative mechanisms of actions and therapeutic profiles that potentially address the unmet needs of patients with these diseases.
We are developing roluperidone (f/k/a MIN-101) for the treatment of negative symptoms in patients with schizophrenia and have exclusive rights to develop and commercialize MIN-301 for the treatment of Parkinson’s disease. In addition, we previously co-developed seltorexant (f/k/a MIN-202 or JNJ-42847922) with Janssen Pharmaceutica NV, one of the Janssen Pharmaceutical Companies of Johnson & Johnson (“Janssen”), for the treatment of insomnia disorder and adjunctive treatment of Major Depressive Disorder (“MDD”). In June 2020, we exercised our right to opt out of our agreement with Janssen for the future Phase 3 development and commercialization of seltorexant. Under the terms of the opt-out agreement, we were entitled to collect royalties in the mid-single digits on potential future worldwide sales of seltorexant in certain indications, with no further financial obligations to Janssen. In January 2021, we sold our rights to these potential royalties to Royalty Pharma plc (“Royalty Pharma”) for a $60 million cash payment and up to an additional $95 million in potential milestone payments, subject to completion of Phase 3 trials by Janssen and regulatory approvals. Janssen is currently conducting two Phase 3 studies with seltorexant, a third Phase 3 study was discontinued during 2022.
In August 2022, we submitted a New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) for our lead product candidate, roluperidone, for the treatment of negative symptoms in schizophrenia. The FDA initially notified us that they would not accept the file for review, issuing a refusal to file letter (“RTF”) in October 2022. Subsequently, we requested a formal dispute resolution and appealed the RTF, following which, on April 27, 2023, the FDA filed our NDA for roluperidone. In May 2023, the FDA confirmed that the NDA for roluperidone was assigned a standard review classification and a Prescription Drug User Fee Act (“PDUFA”) goal date of February 26, 2024. The FDA advised that it identified potential review issues that had been previously cited in the RTF decision letter, which included those discussed at the Type C meeting in March 2022. See “—Clinical and Regulatory Updates” below for more information.
We have not received any regulatory approvals to commercialize any of our product candidates, and we have not generated any revenue from the sales or license of our product candidates. We routinely evaluate the status of our drug development programs as well as potential strategic options. We have incurred significant operating losses since inception and expect to continue to incur net losses and negative cash flows from operating activities for the foreseeable future in connection with the clinical and regulatory activities associated with advancing our product candidates. As of September 30, 2023 and December 31, 2022, we had an accumulated deficit of $387.8 million and $366.8 million, respectively. For the nine months ended September 30, 2023 and 2022, we recorded net losses of $21.0 million and $25.4 million, respectively.
Clinical and Regulatory Updates
New Drug Application Filed
On April 27, 2023, the FDA filed our NDA for roluperidone for the treatment of negative symptoms in patients with schizophrenia. The decision to file the NDA followed our request for formal dispute resolution and appeal of the RTF. The issues cited in the RTF decision included those discussed at the Type C meeting in March 2022. In granting the appeal, the FDA deciding official agreed with us that the issues cited in the RTF decision should be considered during the FDA’s review of the NDA.
16
On May 8, 2023, we received confirmation from the FDA that the NDA for roluperidone has been filed in accordance with the Appeal Granted letter dated April 27, 2023 and assigned a standard review classification and a PDUFA goal date of February 26, 2024. The FDA advised that it identified potential review issues that had been previously cited in the RTF decision letter, which included those discussed at a Type C meeting in March 2022, described further below.