Minerva Neurosciences(NERV) - 2025 Q2 - Quarterly Report

PART I — Financial Information Item 1. Financial Statements The company reported a $7.0 million net loss for the six months ended June 30, 2025, with $15.2 million cash and a going concern uncertainty Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $15,248 | $21,362 | | Total current assets | $15,548 | $22,269 | | Total assets | $30,420 | $37,144 | | Total current liabilities | $2,529 | $2,837 | | Liability related to the sale of future royalties | $60,000 | $60,000 | | Total liabilities | $62,529 | $62,837 | | Total stockholders' deficit | ($32,109) | ($25,693) | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,298 | $3,860 | $2,660 | $8,028 | | General and administrative | $2,076 | $2,417 | $4,617 | $4,932 | | Loss from operations | ($3,374) | ($6,278) | ($7,277) | ($12,960) | | Net loss | ($3,259) | ($8,233) | ($7,012) | ($16,802) | | Net loss per share | ($0.43) | ($1.09) | ($0.93) | ($2.22) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,114) | ($10,032) | | Net decrease in cash, cash equivalents and restricted cash | ($6,114) | ($10,032) | | Cash, cash equivalents and restricted cash at end of period | $15,348 | $30,981 | - The FDA issued a Complete Response Letter (CRL) for the company's New Drug Application (NDA) for roluperidone in February 2024, requiring an additional confirmatory clinical trial to address deficiencies[23] - As of June 30, 2025, the company had cash, cash equivalents, and restricted cash of $15.3 million; management believes this is insufficient to fund operations for the next twelve months but has cost reduction initiatives to mitigate this condition[29] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses decreased operating expenses, the FDA's roluperidone CRL, and liquidity concerns necessitating strategic alternatives Overview - The company is a clinical-stage biopharmaceutical firm focused on Central Nervous System (CNS) diseases, with its lead candidate being roluperidone for schizophrenia[72] - In February 2024, the FDA issued a Complete Response Letter (CRL) for roluperidone's New Drug Application (NDA), confirming the need for an additional confirmatory clinical trial[74] - The required new trial for roluperidone will be a 52-week, double-blind, placebo- or active-controlled study to demonstrate long-term efficacy and safety in monotherapy[75] - Due to the CRL and its current cash position, the company is reducing costs and exploring strategic alternatives to maximize stockholder value[80] Results of Operations Comparison of Operating Expenses (in millions) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $1.3 | $3.9 | $2.7 | $8.0 | | General & Administrative | $2.1 | $2.4 | $4.6 | $4.9 | - R&D expenses for the six months ended June 30, 2025, decreased by $5.3 million compared to the same period in 2024, primarily due to lower costs for the drug substance validation campaign, the C18 study, and consultant fees[97] - Non-cash interest expense related to the sale of future royalties was zero for the first six months of 2025, compared to $4.6 million in the same period of 2024, following a revision of estimates in Q3 2024[101] Liquidity and Capital Resources - As of June 30, 2025, the company had cash, cash equivalents, and restricted cash of $15.3 million and an accumulated deficit of $402.4 million[102] - Management states that existing cash is insufficient to fund operating expenses and capital requirements, but believes it can mitigate this through cost reduction initiatives to meet obligations for at least the next twelve months[102] - Net cash used in operating activities decreased to $6.1 million for the first six months of 2025 from $10.0 million in the same period of 2024, primarily due to a smaller net loss[112][113][114] - The company has an At-the-Market (ATM) equity offering program with $22.6 million eligible for sale as of June 30, 2025, though no shares were sold under it in the first half of 2025[106] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Minerva Neurosciences is not required to provide the information for this item - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide quantitative and qualitative disclosures about market risk[120] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal financial reporting controls - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[122] - No changes in internal control over financial reporting occurred during the latest fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[123] PART II — Other Information Item 1. Legal Proceedings The company is not currently party to any legal proceedings that are expected to have a material adverse effect on its business - As of the report date, the company is not aware of any claim or litigation that would have a material adverse effect on its financial position or results of operations[67][126] Item 1A. Risk Factors Significant risks include historical losses, funding needs for roluperidone, strategic review failure, stock volatility, and Nasdaq delisting - The company has a history of significant losses, with an accumulated deficit of approximately $402.4 million as of June 30, 2025, and may never achieve profitability[128] - The FDA's CRL for roluperidone requires at least one additional positive, adequate, and well-controlled study, creating significant uncertainty around regulatory approval[130] - Existing cash of $15.3 million is not sufficient to fund operating expenses and capital requirements, and failure to raise additional capital may force the company to delay, limit, or terminate development efforts[133] - The company has initiated a review of strategic alternatives, but there is no assurance this will result in a transaction; if not completed, the board may pursue dissolution and liquidation[137][139] - The company regained compliance with Nasdaq listing rules but is subject to a discretionary panel monitor for one year from March 17, 2025, and faces a risk of delisting if it fails to maintain compliance[146] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None[161] Item 3. Defaults Upon Senior Securities Not applicable - Not applicable[162] Item 4. Mine Safety Disclosures Not applicable - Not applicable[163] Item 5. Other Information Not applicable - Not applicable[164] Item 6. Exhibits This section lists filed exhibits, including articles of incorporation, bylaws, and CEO/CFO certifications required by Sarbanes-Oxley - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[167]