Minerva Neurosciences(US:NERV)2023-03-08 11:30Financial Performance - The company reported an accumulated deficit of $366.8 million as of December 31, 2022, compared to $334.7 million in 2021, indicating a net loss of $32.1 million for 2022, down from $49.9 million in 2021 [370]. - The net loss for the year ended December 31, 2022, was $32.1 million, compared to a net loss of $49.9 million in 2021, indicating an improvement of approximately 35.9% [392]. - The company has not generated any revenue from product sales to date and anticipates continued net losses as it develops its product candidates [399]. Research and Development - Research and development expenses for roluperidone were $12.6 million in 2022, a decrease from $14.4 million in 2021, reflecting the company's strategic focus on this lead drug candidate [385]. - Research and development expenses were $14.6 million in 2022, down from $32.0 million in 2021, reflecting a decrease of $17.4 million [393]. - Research and development costs are expensed as incurred, including licensing fees and salaries related to R&D functions [418]. - Payments under research contracts may depend on successful patient enrollment and completion of clinical trial milestones, leading to potential variability in expense recognition [418]. - The company capitalizes incomplete research projects acquired through business combinations as indefinite-lived intangible assets, subject to impairment testing [420]. Regulatory and Development Updates - The NDA for roluperidone was submitted in August 2022 but was met with a refusal to file letter from the FDA in October 2022, which remains in effect [369]. - The company anticipates ongoing discussions with the FDA regarding the status of the roluperidone NDA and development program [372]. - The company deferred the development of MIN-301 due to limited resources, resulting in a non-cash impairment charge of $15.2 million in 2021 [382]. Cash and Capital Management - As of December 31, 2022, the company had approximately $36.2 million in cash, cash equivalents, and restricted cash, expected to meet operating commitments for the next 12 months [399]. - The company plans to raise additional capital or seek product collaborations to support the development and commercialization of its product candidates [385]. Royalties and Agreements - The company sold its rights to potential royalties from seltorexant to Royalty Pharma for $60 million, with additional milestone payments of up to $95 million contingent on the completion of Phase 3 trials [379]. - The company entered into an agreement with Royalty Pharma for an upfront payment of $60 million for its royalty interest in seltorexant, with potential additional milestone payments of up to $95 million [403]. - The company recognized $1.9 million and $7.4 million in non-cash interest expense related to the royalty agreement for the three and twelve months ended December 31, 2022, respectively [380]. - Non-cash interest expense for the sale of future royalties rose to $7.4 million in 2022 from $6.3 million in 2021, an increase of $1.1 million [397]. - As of December 31, 2022, the company recorded a liability related to the sale of future royalties amounting to $60 million, with potential additional milestone payments of up to $95 million [427]. Impairment and Goodwill - The company recognized a non-cash charge of $15.2 million for the impairment of the MIN-301 intangible asset as of December 31, 2021, due to a strategic decision to focus on the lead drug candidate, roluperidone [422]. - The company has not recognized any impairment of goodwill for the years ended December 31, 2022, and 2021, with $14.9 million of goodwill associated with a reporting unit having zero or negative carrying value [424]. - The company tests its indefinite-lived intangibles, including IPR&D assets, for impairment annually, with no impairments recognized for the years ended December 31, 2022, and 2021 [421]. Tax and Interest - Deferred tax assets are evaluated for realization based on a more-likely-than-not criterion, with no interest or penalties related to income taxes for the years ended December 31, 2022, or 2021 [426]. - The effective annual interest rate estimated by the company as of December 31, 2022, was approximately 10.7%, with a 20% increase in clinical success probability potentially increasing non-cash interest expense by $37.7 million [428]. Stock and Shareholder Information - A reverse stock split of 1-for-8 was executed on June 17, 2022, reducing the number of outstanding shares from 42,721,566 to 5,340,193 [412].