Welcome to the Minerva Neurosciences third quarter 2021 call. At this time, all participants are in a listen only mode. There'll be a question-and-answer session following today's prepared remarks. This call is being webcast live on the investor 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. Please proceed.
Good morning. A press release with the company's third quarter 2021 financial results and business highlights became available at 7:30 A.M. Eastern Time today and can be found on the investor 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, Chief Financial Officer. Following our prepared remarks, we will open the call for Q&A. Before we begin, I'd 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. Those 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 quarter report on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC earlier today. Any forward-looking statements made on this call speak only as of today's date, Monday, November 8, 2021, 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. Thanks for joining us today. I would like to focus this morning's update on our lead program, Roluperidone. On September 30, 2021, we announced the results from a pivotal bioequivalence study where the results met key pharmacokinetic objectives and demonstrated bioequivalence across the various formulations. Recall, the objective of this study was to compare the formulations employed in the phase II-B and phase III trials, as well as a planned commercial formulation designed in conjunction with our commercial supplier to facilitate large scale manufacturing. In this type of study, the area under the curve to last detectable concentration, AUClast, the area under the curve extrapolated to infinity, AUCinf, and the maximum plasma concentration, Cmax, are the most commonly used plasma pharmacokinetic parameters to evaluate bioequivalence between various formulations.
For Roluperidone, our earlier work has shown that efficacy in patients with negative symptoms of schizophrenia is mostly driven by plasma exposure of the drug, i.e. AUCs, whereas safety margins improved by reducing Cmax of the drug. Furthermore, as Roluperidone is intended for chronic use and the assessed formulations are controlled release, AUCinf is the most relevant of the AUC measurements when single dose data are collected and used for determining bioequivalence. In this study, the two most important objectives were to establish, firstly, the comparability under fasted conditions of the 64 mg tablet of the phase III formulation of Roluperidone compared to the 64 mg dose based on the administration of two 32 mg tablets of Roluperidone used in the phase II-B study.
Secondly, the comparability under fasted conditions of a 64 mg tablet of the planned commercial formulation of Roluperidone compared to the 64 mg dose based on the administration of two 32 mg tablets of Roluperidone used in the phase II-B study. The data showed that both objectives were met. The AUCinf were bioequivalent, and the Cmax of the reformulated phase III and planned commercial formulations had been reduced substantially compared to the phase II-B formulation. In this study, we also demonstrated bioequivalence in terms of AUCs and Cmax between the 64 mg formulation of the planned commercial tablets and the fasted conditions compared to the formulation used in the phase III.
Bioequivalence, both in terms of AUCinf and Cmax of the 64-mg dose of the planned commercial formulation and the fed and fasted conditions. In summary, I believe the bioequivalence study results represent important progress along Minerva's critical path towards submission of an NDA for Roluperidone. Moving on to our recent correspondence with the FDA. Last week, we announced that the FDA had denied the company's request for a pre-NDA meeting for Roluperidone and proposed that the Type C guidance meeting would be more appropriate. Therefore, the company plans to request a Type C meeting. To conclude my update this morning, the successful completion of the bioequivalence study represents an important component of the NDA package. Subject to the timing of any feedback from the FDA, we continue to work towards the submission of a new drug application in the first half of 2022.
Finally, I would like to take this opportunity to welcome Dr. Ramana Kuchibhatla as our new Head of R&D at Minerva. I will now turn it over to Fred for the financial update.
Thank you, Remy. Earlier this morning, we issued a press release summarizing our operating results for the third quarter ended September 30, 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, restricted cash, and marketable securities as of September 30, 2021, were approximately $65.7 million, compared to $25.5 million as of December 31, 2020. Our cash position was strengthened significantly in January 2021, with the receipt of a $60 million upfront cash payment from Royalty Pharma in connection with Royalty Pharma's acquisition of the company's royalty interest in seltorexant.
Under this agreement, Minerva has the potential to receive up to a further $95 million in additional payments contingent upon the achievement of certain clinical, regulatory, and commercialization milestones by Janssen. As a result of the sale of Minerva's interest in the seltorexant royalty stream to Royalty Pharma, Minerva will recognize non-cash interest expense related to the amortization of this future revenue stream as compared to the cash payments ultimately received from Janssen. Accordingly, for the three and nine months ended September 30, 2021, Minerva recognized $1.7 million and $4.6 million, respectively, in non-cash interest expense related to this agreement. The $60 million payment received from Royalty Pharma has been included on our balance sheet under liability related to the sale of future royalties.
As we recognize interest expense, the liability related to the sale of future royalties will increase until such time that we begin to receive the related royalty payments, which will thereafter reduce the liability on our balance sheet. While the upfront payment and future milestone payments will continue to be included on our balance sheet as a liability, as I described earlier. In accordance with the terms of our agreement with Royalty Pharma, in the event that Janssen was to discontinue the seltorexant program for any reason, Minerva has no obligation to repay any amounts received from Royalty Pharma. We 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 based on our current operating plan. The assumptions upon which this estimate is based are routinely evaluated and may be subject to change.
For the three months ended September 30, 2021 and 2020, research and development expense was $4.5 million and $4.6 million, respectively, a decrease of approximately $0.1 million. For the three months ended September 30, 2021 and 2020, non-cash stock compensation expense included within R&D was $0.5 million and $0.8 million, respectively. For the nine months ended September 30, 2021 and 2020, R&D expense was $13.3 million and $18.5 million, respectively, a decrease of approximately $5.2 million. For the nine months ended September 30, 2021 and 2020, non-cash stock compensation expense included within R&D was $1.8 million and $2.2 million, respectively.
The decrease in R&D expense for both the three and nine-month periods ended September 30th, 2021 versus the same periods in 2020 was primarily due to lower costs for the phase III clinical trial of Roluperidone, for which the three-month core study portion of the trial was completed in May 2020. For the three months ended September 30th, 2021 and 2020, general and administrative expense was $3 million and $3.5 million, respectively, a decrease of approximately $0.5 million. For the three months ended September 30th, 2021 and 2020, non-cash stock compensation expense included within G&A was $0.6 million and $1.2 million, respectively.
For the nine months ended September 30th, 2021 and 2020, G&A expense was $10.7 million and $13.5 million, respectively, a decrease of approximately $2.8 million. For the nine months ended September 30th, 2021 and September 30th, 2020, non-cash stock compensation expense included within G&A was $2.2 million and $5.6 million, respectively. The decrease in G&A expense for both the three and nine-month periods ended September 30th, 2021 was primarily due to non-cash stock compensation charges resulting from certain stock option awards approved in June 2020, as well as from additional stock compensation expense incurred under a severance agreement during 2020.
Net loss was $9.2 million for the third quarter of 2021 or net loss per share of $0.22 basic and diluted, as compared to a net loss of $8.1 million or net loss per share of $0.19 basic and diluted for the third quarter of 2020. Net loss was $28.6 million for the nine months ended September 30th, 2021, or net loss per share of $0.67 basic and diluted, as compared to net income of $9.3 million or net income per share of $0.23 basic and diluted for the nine months ended September 30th, 2020.
The decreases in net income for both the three and nine-month periods ended September thirtieth, 2021, were primarily due to the company's opting out of its joint development agreement with Janssen Pharmaceutica for seltorexant during the second quarter of 2020. As a result of opting out of the agreement, the company immediately recognized $41.2 million in collaborative revenue, which had previously been included on the balance sheet under deferred revenue. Now I would like to turn the call over to the operator for any questions. Operator?
Thank you. To ask a question you need to press star one on your telephone. To withdraw your question press the pound key. Our first question comes from Andrew Tsai with Jefferies.
Good morning, and thanks for taking my questions. First one is just on the timelines of the Type C meeting. Congratulations, by the way, on completing the bioequivalence study. You know, my understanding is the FDA generally takes at most 75 days to schedule a Type C. Last year sounds like you received minutes within 20 days of your Type C meeting, and you came back to the street one day afterwards, I believe. Basically, you know, can we expect a Type C meeting outcome to happen, say, within 2-3 months? Or can you give a more granular timeline, you think? Thanks. That's my first question.
Yeah. Hello, Andrew. Remy speaking. Yes, thank you for your question. As you know, I mean, the timelines for a Type C meeting is based on law. Yes. I mean, definitely it is a process of 75 days. It is also true that last year when we had our Type C meetings, the things came back much quicker from the agency. I think today we have to stick to this, how to say, 75 days, yes, basically. Obviously, we have immediately reacted and your estimate is probably adequate. Yes. It is a 75-day process indeed.
Got it. Thank you. Another question is just more about the FDA, why they think a Type C meeting would be more appropriate than a pre-NDA. I mean, should we be inferring maybe the FDA is still very unsure of whether the topics that you guys discussed in the last Type C meeting may not have been fully addressed? I guess the root of the question is what prompted the FDA to do this instead? Thanks.
Obviously I'm not at the place of the FDA. Yes. I think to ask about specifically about monotherapy is a completely fair question. Yes. As you know, we have done our development in monotherapy for very obvious reasons. Yes. The first one being the fact that if you want to claim for a specific effect on negative symptoms, this is at minimum in my opinion, and it has been recently published by a group of experts, okay, well, this is probably the only way, I mean, to do a study monotherapy versus placebo in order to really pick up a specific effect on negative symptoms.
I think it is a really important debate here or a question. Keep also in mind that, I mean, common practice, and it's mostly focused on positive symptoms indeed, but I mean, common practice is to try to keep someone who has a diagnostic of schizophrenia, treated with antipsychotics. When you are putting these two pieces together, I mean, you might have a discussion around why monotherapy. Yes.
I think we have a really good set of data together because remember we recently or a few months ago now, time is running, we have disclosed the results of the open-label extension, where, I mean, technically, you can see an improvement of negative symptoms, but this is in parallel, you have technically some improvement in terms of positive symptoms or at minimum stability of positive symptoms staying at a very low level after monotherapy with Roluperidone. If you remember, we had an extremely low relapse rate. Yes. I mean, basically patients who are presenting with positive symptoms of psychotic symptoms over this period of one year where we followed the patients.
When you're putting all this together again, I think, it's a fact to have a very, very good discussion about monotherapy based on our data. I'm really hopeful that, I mean, we have the right output and the right input and the right output at the end of the day from this meeting in order to move forward, yeah.
Yes. Makes sense. Thank you for all the color and fingers crossed.
Yeah. Thank you so much, Andrew.
Thank you. Our next question comes from Tom Shrader with BTIG. Your line is open.
Good morning. Let me add my congratulations for the bridging study. That's a nice result. Very related to the previous question, is this the first time the FDA will have heard you present the open-label extension, and how much of the data did they see in your request for a pre-IND meeting? And then a kind of a follow-up is, do you expect to have to go to this meeting with the next trial sort of flushed out, or would that be a subsequent discussion? Thank you.
Great questions. clearly the FDA has not seen a lot or to be very clear, nothing about the extension date apart from obviously the press release that we have put out about these results. Yes, you know, when you're doing a meeting request, you are not going into the details. You are mostly going through some of the questions you might have to put in your briefing book and you might or you want to discuss during the pre-NDA meeting. Long story short, I mean, the short answer is that they have no, how to say, insight into this data.
I think if I read in, into your question, I think it is an important piece of information, yes, clearly to be able to demonstrate what we have demonstrated. Now the concerning the, an additional trial, in a very way that, I mean, people think that we should do a trial or we should have started the trial. People think that, I mean, we have enough. I think when you're looking to the, to the guidance of 2019, November 2019, I think we are ticking as the boxes because we are dealing with an unmet medical need. We still well controlled studies. So I think we have a lot here to share and to discuss with the, with the agency. And to, you know, we'll see, yes, what comes out from this meeting.
Based on the outcome, we will decide. I mean, if you are thinking one second about an additional study, you need to know which kind of study. This will not be the topic of the discussion. We really focus on monotherapy. Afterwards, obviously, we can always discuss about what would be a study. Again, I am very clear. I think we have what we need in order to have the right discussion. This clarification in monotherapy makes a lot of sense to me. Hopefully the agency will see the data package we have, like, a package which can be submitted just for an NDA.
Great. Thank you.
You're welcome.
Thank you. Our next question comes from Jason Butler with JMP Securities. Your line is open.
Hi. Thanks for taking the questions and appreciate the updates. Remy, just another one on the Type C meeting. Has FDA at all indicated whether it now accepts the bioequivalence data or is bridging the phase II formulation or the phase IIb formulation to the phase III and commercial formulations, or is that still not a discussion you've had? In the scenario where you have the Type C meeting and do decide to continue to submit an NDA, would you still think, you know, need a pre-NDA meeting on top of the or in addition to the Type C meeting? Thanks.
Jason. so for the first question about bioequivalence, the answer is no. The FDA has not seen this data. The only things they have seen is again, you know, what we have released or what we have publicly released. Obviously, when you're doing the meeting request, as I explained just before, you know, you're just going through the different points or topics you would like to discuss. I mean, obviously you're not, you're not going into the details of the results. Clearly, I mean, they have not the complete granularity of this data. This said, as you know, I mean, this was a pivotal bioequivalence study, which is basically something which is going according to some guidance.
Clearly, I mean, either you're bioequivalent or you're not. I mean, in our case, we are bioequivalent for the key parameters, as I explained in my talk just before. I don't think that there will be any surprise there. Concerning your second question, you know, I think this more focused discussion about monotherapy and obviously totality of evidence is a right discussion, and this was definitely a discussion we wanted to have during the pre-NDA meeting as well. I think depending on the outcome of this meeting, we will see. I mean, we are still trying to stick to our guidance.
Again, based on the outcome and based on when we get the feedback from the FDA and the outcome, but we are still sticking to the submission of our NDA during the first half of next year. This is what I think I can say about this, but I'm very hopeful that this will be helping us to definitely stay how to say, with the timelines we have given.
Okay, great. Then just one more, just to clarify. Obviously there's the monotherapy topic. But in addition to that, are the topics that you plan to propose discussing with FDA at the type C meeting essentially overlapping with what you had, you know, would have talked about at the pre-NDA meeting?
Part of the monotherapy, which was part of it, yes, because obviously we have developed a drug in monotherapy for the reasons I was explaining before, yeah. Yes, I mean, some of the topics are overlapping. The only difference, if you want to find a difference, is that, I mean, that we in a pre-NDA meeting, we're also going through the, you know, so different modules of your NDA, like CMC, like preclinical and so on. Yes. I mean, and not only focusing on the clinical aspects. Yes. So this is a difference if you want to see a difference.
This said, as you know, for example, for the CMC, you can have some specific meetings, you know, to check, or to tick the boxes as we have done, by the way, also in the past. I mean, I think we have really ways to really tick all the boxes, before we are going to do our submission. I think this is the difference. I mean, less focusing on ticking the box for non-clinical aspects, and focusing more on the clinical aspects.
Okay, great. Thanks for taking the questions.
Thank you, Jason.
Thank you. Our next question comes from Douglas Tsao with H.C. Wainwright. Your line is open.
Hi. Good morning. Thanks for taking the questions. I'm just curious, Remy, when you think about sort of your discussion with the Agency, the focus or how important do you think it is? Because there's been or I guess, you know, we've with investors, there's obviously been a conversation whether the best sort of use of the of Roluperidone is sort of an adjunctive versus monotherapy. When you think about going to the Agency in your discussion, has it been primarily focused or exclusively focused as a monotherapy? Do you think, you know, beyond the open-label extension data, sort of what do you think are your best sort of points of evidence just to utilize to support that setting?
This is obviously an important question as well. Yes. I mean, obviously, I could give a very long answer. Yes. I think the best answer to your question is to first of all, I think the scientific community is really recognizing that a lot of patients with a diagnostic of schizophrenia, first of all, do not take, sorry, the treatment if they have the possibility. I'm speaking here about the commercially available treatments. Yes. Do not take the treatment if they're, how to say, have the possibility to stop that treatment. This is one point. There is a need of an alternative treatment.
The second aspect is that, it's quite clear as well, is that, I mean, the current existing treatments are definitely not improving negative symptoms. There are, I mean, meta-analysis, I mean, a lot of meta-analysis are pointing to the fact that, you have a worsening of negative symptoms due to the treatment on top of the, you know, negative symptoms of the disease. Yes. It is also true that, I mean, a lot of work has been done over the last two years just to see if you can reduce the dosage of the antipsychotics and does it have an impact on the number of relapses.
All this is a very active research going on in terms of better understand the, you know, the phenotype of the patients at different stages of the disease. I think it is very clear or becoming more and more clear that the significant part of patients with schizophrenia and having really been bothered with negative symptoms and so, and not functioning, do not need continuous treatment with antipsychotics. This is one of the hypothesis we had when we started in addition to demonstrate the specific effect.
I think our data are showing that, I mean, this is possible because keep in mind that we take or we took in the two studies, we took patients who were treated or stabilized on positive symptoms or psychotic symptoms with antipsychotics. They needed to have a minimum score of negative symptoms, and then we switched them to our treatment. That's in monotherapy. When you see that these patients are staying stable on positive symptoms at very low level and that the relapse rate is extremely low over one year period of treatment, you know, we have an additional piece of information here confirming that some patients can be without antipsychotics continuously on board. Yeah.
All this I think has to be re-explained, has to be rediscussed, in order to, you know, to show the full power of the data we have generated, and the patient population who might benefit from monotherapy. Obviously, I'm not saying that antipsychotics are not important or the existing treatments are not important because, obviously I'm not claiming or I'm not saying that, I mean, Roluperidone will treat an acute episode of positive symptoms with agitation, with severe hallucinations or delusions. I think we are just trying to fill a gap where I mean there is no existing treatment here.
Thank you. Remy, I guess just one follow-up to that is do you think that you have sort of enough data to support, or would you seek a specific labeling, sort of recommendation as for Roluperidone to be monotherapy? Or do you think it would be appropriate for the label to be sort of more agnostic whether it would be used as an adjunct or for monotherapy?
I have the, I obviously don't have the final answer on this. The reason I gave the meeting is I think that's what I think basically is that, you know, you can give other drug in add-on. We never have promoted this more than that. We have just done the safety aspects of the DDI studies which are needed in order to give our treatment in add-on to antipsychotics.
But again, I think to give the best chance to patients to really improve in terms of negative symptoms and at the end of the day, in terms of functioning, and again, because there is a significant, really a significant number of patients who can benefit from monotherapy with our drug without having antipsychotics on board all along, I think this is what you have to do and what we have demonstrated and hopefully the FDA will get this. This is where we are. Yes, and this is what I'm thinking. Can be given add-on, but probably the best outcome in most of the cases is not to put antipsychotics continuously on board.
Okay, great. Thank you.
You're welcome.
I'm showing no further questions. At this time, I'd like to turn the call back to management for any closing remarks.
Yes. Thank you everybody for today's call, yes, and for all the questions and for listening to our earnings call and I'm really looking forward to update you very soon about progress we will make over the next coming few weeks and months. Thank you again and have a nice day. Bye-bye.
Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect. Everyone, have a great day.