
PART I — Financial Information Item 1. Financial Statements The unaudited condensed consolidated financial statements for the three months ended March 31, 2020, show a net loss of $12.2 million, a decrease in total assets to $68.8 million, and continued operation with a significant accumulated deficit of $298.9 million and negative cash flows from operations Condensed Consolidated Balance Sheets As of March 31, 2020, the company reported total assets of $68.8 million, a decrease from $77.5 million at December 31, 2019, primarily due to a reduction in marketable securities, while total liabilities slightly increased to $50.2 million and total stockholders' equity decreased to $18.6 million from $27.8 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2020 ($M) | December 31, 2019 ($M) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 30.0 | 21.4 | | Marketable securities | 7.5 | 24.4 | | Total current assets | 38.5 | 47.1 | | Total assets | 68.8 | 77.5 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | 7.1 | 6.6 | | Total liabilities | 50.2 | 49.7 | | Accumulated deficit | (298.9) | (286.7) | | Total stockholders' equity | 18.6 | 27.8 | | Total liabilities and stockholders' equity | 68.8 | 77.5 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2020, the company reported a net loss of $12.2 million, or ($0.31) per share, an improvement from the net loss of $15.8 million, or ($0.41) per share, in the same period of 2019, primarily due to lower research and development expenses Condensed Consolidated Statement of Operations (Unaudited) | Metric | Three Months Ended March 31, 2020 ($M) | Three Months Ended March 31, 2019 ($M) | | :--- | :--- | :--- | | Research and development | 8.1 | 11.6 | | General and administrative | 4.2 | 4.7 | | Total expenses | 12.3 | 16.3 | | Loss from operations | (12.3) | (16.3) | | Net loss | (12.2) | (15.8) | | Net loss per share, basic and diluted | (0.31) | (0.41) | Condensed Consolidated Statements of Cash Flows For the first quarter of 2020, net cash used in operating activities was $9.2 million, net cash provided by investing activities was $17.0 million from marketable securities maturities, and net cash provided by financing activities was $0.8 million from stock option exercises, resulting in a net increase in cash of $8.6 million and an end-of-period balance of $30.1 million Cash Flow Summary (Unaudited) | Activity | Three Months Ended March 31, 2020 ($M) | Three Months Ended March 31, 2019 ($M) | | :--- | :--- | :--- | | Net cash used in operating activities | (9.2) | (9.6) | | Net cash provided by (used in) investing activities | 17.0 | (10.6) | | Net cash provided by financing activities | 0.8 | 0.5 | | Net increase (decrease) in cash | 8.6 | (19.6) | | Cash, cash equivalents and restricted cash, end of period | 30.1 | 30.7 | Notes to Condensed Consolidated Financial Statements The notes detail the company's operations, liquidity, accounting policies, and key agreements, highlighting its clinical-stage biopharmaceutical nature, an accumulated deficit of $298.9 million, sufficient cash for the next 12 months, and a significant unaccrued $6.5 million contingency with Janssen regarding seltorexant cost-sharing obligations - The company is a clinical-stage biopharmaceutical company focused on CNS diseases, with lead candidates roluperidone, seltorexant (co-developed with Janssen), and MIN-30124 - As of March 31, 2020, the company had an accumulated deficit of approximately $298.9 million and believes its existing cash of $37.6 million is sufficient to fund operations for at least the next 12 months2627 - The company is in a dispute with its partner Janssen regarding the achievement of "Decision Point 4" for the seltorexant program, with Janssen having invoiced Minerva for $6.5 million for its 40% share of Phase 3 development costs through March 31, 2020, which Minerva has not accrued due to the disagreement7384 - In 2019, the company determined that the MIN-117 In-process Research and Development (IPR&D) asset was fully impaired, resulting in a $19.0 million expense included in R&D41 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical program status, financial results, and liquidity, noting the fully enrolled Phase 3 roluperidone trial with Q2 2020 top-line results expected, discontinued MIN-117 development, positive Phase 2b seltorexant results but a cost-sharing dispute with Janssen, decreased R&D expenses to $8.1 million in Q1 2020, and sufficient cash for the next 12 months while acknowledging future capital needs Clinical Updates The pivotal Phase 3 trial for roluperidone in schizophrenia is fully enrolled with 515 patients, with 12-week top-line results expected in Q2 2020, while MIN-117 development for MDD has been discontinued after a failed Phase 2b trial, and seltorexant has shown positive Phase 2b results but faces a cost-sharing disagreement with Janssen regarding Phase 3 obligations - The pivotal Phase 3 trial of roluperidone (MIN-101C07) has completed enrollment with 515 patients, and top-line results from the 12-week double-blind portion are anticipated in the second quarter of 20209697 - Following the failure of the Phase 2b trial of MIN-117 to meet its primary and key secondary endpoints, the company has no plans for further clinical development of MIN-117 in Major Depressive Disorder (MDD)106108 - The company disagrees with its partner Janssen that "Decision Point 4" has been reached for the seltorexant program, which would trigger cost-sharing obligations, and Janssen has invoiced the company for $6.5 million for Phase 3 costs through March 31, 2020123 Results of Operations For the three months ended March 31, 2020, R&D expenses decreased by $3.5 million to $8.1 million compared to the same period in 2019, primarily due to lower development costs for the roluperidone and MIN-117 trials, while general and administrative expenses also decreased by $0.5 million to $4.2 million mainly from lower non-cash stock-based compensation and professional fees Comparison of Operating Expenses (Q1 2020 vs Q1 2019) | Expense Category | Q1 2020 ($M) | Q1 2019 ($M) | Change ($M) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Research & Development | 8.1 | 11.6 | (3.5) | Lower development expenses for Phase 3 roluperidone and Phase 2b MIN-117 trials | | General & Administrative | 4.2 | 4.7 | (0.5) | Decrease in non-cash stock-based compensation and professional fees | Liquidity and Capital Resources As of March 31, 2020, the company had $37.6 million in cash, cash equivalents, restricted cash, and marketable securities, which management believes is sufficient for at least the next 12 months, but acknowledges the need for additional capital to fully fund development programs, especially given a potential significant payment to Janssen - The company had approximately $37.6 million in cash, cash equivalents, restricted cash, and marketable securities as of March 31, 2020140 - Management asserts that existing cash is sufficient to meet commitments for at least the next 12 months, but acknowledges the need to raise additional capital for future operations and later-stage clinical development140146 - A significant financial uncertainty is the dispute with Janssen; if the company is required to make a significant payment, it may need to incur debt or raise equity, which may not be available on acceptable terms145 Item 3. Quantitative and Qualitative Disclosures about Market Risk This item is not applicable for the reporting period - The company states that this section is not applicable158 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2020, concluding they were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2020160 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls161 PART II — Other Information Item 1. Legal Proceedings The company reports that it is not party to any claim or litigation that would be reasonably expected to have a material adverse effect on its business - As of the report date, the company is not involved in any legal proceedings expected to have a material adverse effect on the business163 Item 1A. Risk Factors The company highlights significant risks, including its history of substantial losses, the expectation of continued losses, the need for additional capital to finance operations, and a new material risk factor concerning the COVID-19 pandemic, which could adversely affect business operations, delay clinical trials, and negatively impact capital markets, potentially limiting the ability to raise funds - The company has a history of significant losses, with a net loss of $12.2 million for Q1 2020 and an accumulated deficit of $298.9 million as of March 31, 2020, and expects to incur significant losses for the foreseeable future165166167 - The company will require additional capital to finance its operations and complete the development of its product candidates, and future financing may not be available on acceptable terms, if at all168170 - The COVID-19 pandemic poses significant risks, including potential disruption to business operations, delays in clinical trials due to patient retention and site access issues, and negative impacts on global financial markets, which could hinder the ability to raise capital171172173 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not sell any unregistered securities or repurchase any of its equity securities during the three months ended March 31, 2020 - No unregistered securities were sold during the three months ended March 31, 2020175 - No securities were repurchased by the issuer during the three months ended March 31, 2020176 Item 6. Exhibits This section lists the exhibits filed as part of the quarterly report, including the company's certificate of incorporation, bylaws, and certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act - The report includes required exhibits such as corporate governance documents and Sarbanes-Oxley certifications from the CEO and CFO182