Business description of Minerva-Neurosciences-Inc from last 10-k form

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This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. 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 Annual Report on Form 10-K 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.

Part I

Overview

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patients suffering from central nervous system, or CNS, diseases. Leveraging our deep domain expertise, we have acquired or in-licensed four development-stage proprietary compounds that we believe have innovative mechanisms of action with potentially positive therapeutic profiles. Our lead product candidate is MIN-101, a compound for the potential treatment of patients with schizophrenia. In addition, our portfolio includes MIN-202, a compound we are co-developing with Janssen Pharmaceuticals, or Janssen, for the treatment of patients suffering from primary and comorbid insomnia, MIN-117, a compound we are developing for the treatment of patients suffering from major depressive disorder, or MDD, and MIN-301, a compound we are developing for the treatment of patients suffering from Parkinson’s disease. We believe our innovative product candidates have significant potential to transform the lives of a large number of affected patients and their families who are currently not well-served by available therapies in each of their respective indications.

We plan to develop and, if approved by the applicable regulatory authorities, commercialize our product candidates for the CNS pharmaceutical market, including the diseases we are presently targeting, namely schizophrenia, MDD, insomnia and Parkinson’s disease. These CNS diseases affect large numbers of individuals with family members also bearing significant burdens. According to Datamonitor, an independent market research firm, in 2014 4.8 million people suffer from schizophrenia, 30 million suffer from MDD, 53 million suffer from insomnia and more than 2.0 million suffer from Parkinson’s disease in the United States, Japan and the five major European Union markets of France, Germany, Italy, Spain and the United Kingdom.

While there are numerous available therapies in the market for the treatment of the CNS diseases we are targeting, each of these therapies has significant limitations in addressing the needs of patients. We have pursued the development of our product candidates based on our deep knowledge of the pathophysiology of CNS diseases, the pharmacology of our portfolio of compounds and the limitations of current therapies. We believe our product candidates each represent a differentiated treatment option that could overcome the limitations of current therapies and address the unmet needs of patients.

Our management team has extensive experience in the pharmaceutical industry, in particular with respect to CNS products. Dr. Remy Luthringer, our Chief Executive Officer, President and Chief Scientific Officer, has participated in over 750 clinical trials in the CNS area, including trials for many products approved by the U.S. Food and Drug Administration, or the FDA. Our Executive Vice President and Chief Financial Officer, Geoff Race, has worked in the biotechnology industry since 1997 and has acted as a chief executive officer or chief financial officer in seven early stage development companies, including Funxional Therapeutics Ltd and PanGenetics BV.

Our Strategy

Our strategy is to develop and commercialize products with transformative potential addressing critical unmet medical needs in the CNS therapeutic area. Pursuing our strategy will be based on the following principles: innovative clinical development based on mechanisms behind the disease, patient safety and compliance, scientific rigor applied to drug development and the clinical trial process, leveraging patient and caregiver insights to drive scientific advancements, and integrity. Key elements of our strategy are:

We believe our compounds affect multiple CNS disease mechanisms and have the potential to address unmet medical needs in several major CNS disorders. We plan to leverage our management team’s expertise to continue to evaluate our current product portfolio to explore additional indications and develop additional CNS product candidates from our existing intellectual property and acquire rights to additional product candidates that we believe have significant commercial potential and potential to be transformative and address unmet patient medical needs.

Our History

In November 2013, Cyrenaic Pharmaceuticals, Inc., or Cyrenaic, and Sonkei Pharmaceuticals, Inc., or Sonkei, merged and the combined company was renamed Minerva Neurosciences, Inc. Cyrenaic was incorporated in 2007, and exclusively licensed MIN-101 from Mitsubishi Tanabe Pharma Corporation, or MTPC. Sonkei was incorporated in 2008 and exclusively licensed MIN-117 from MTPC. We executed the merger as we saw an opportunity to better serve an underserved patient population through combining a portfolio of promising product candidates targeting CNS diseases. As a result of the merger, we have the rights to develop and commercialize MIN-101 and MIN-117 globally, excluding most of Asia.

We further expanded our product candidate portfolio in February 2014 by acquiring the shares of Mind-NRG SA, or Mind-NRG, which had exclusive rights to develop and commercialize MIN-301. In addition, in February 2014 we entered into a co-development and license agreement with Janssen, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, pursuant to which we will develop MIN-202 and have the right to commercialize MIN-202 in Europe, subject to royalty payments to Janssen, with Janssen having commercialization rights outside of the European Union, subject to royalty payments to us.

Our Pipeline

MIN-101 is a compound we are developing for the treatment of patients with schizophrenia. It is an innovative antagonist of 5-HT2A and sigma2 receptors. The pharmacological effects of MIN-101 are caused by MIN-101 blocking serotonin receptors and sigma receptors, two receptors in the brain that are involved in the regulation of mood, cognition, sleep and anxiety. MIN-101 is meant to block a specific subtype of serotonin receptor called 5-HT2A. When 5-HT2A is blocked, certain symptoms of schizophrenia, such as hallucinations, delusions, agitation and thought and movement disorders, as well as the side effects of antipsychotic treatments can be minimized. Additionally, blocking 5-HT2A promotes slow wave sleep, a sleep stage, which is often disrupted in patients with schizophrenia. MIN-101 is also meant to block a specific subtype of sigma receptor called sigma2, which is involved in movement control, psychotic symptom control and learning and memory. Blocking sigma2 also modulates other neurotransmitters in the brain, in particular dopamine, which is important as individuals with schizophrenia often have elevated levels of dopamine in their brains. Blocking sigma2 also increases calcium levels in neurons in the brain, which can improve memory.  Recent literature also indicated that a sub-type of progesterone protein complex might also be a putative binding site for sigma2 receptors and might explain the effects on cognition of MIN-101.

We believe MIN-101 reflects scientifically supported and innovative mechanisms of action to potentially address the unmet needs of this patient population. We plan to initially seek approval of MIN-101 as a first line monotherapy. We will also study its use as an adjunctive therapy. We believe that MIN-101, could treat the majority of patients diagnosed with schizophrenia if approved. We have recently completed the development of a once-a-day tablet delivery of MIN-101, which is more convenient for patients than the twice-a-day formulation, which was used in previous trials.

In a Phase IIa clinical trial conducted by Cyrenaic in 2009, MIN-101 suggested positive treatment effects and suggested that, in future trials at the intended therapeutic dose and dosing schedule, a favorable safety profile may be seen. MIN-101 has also undergone extensive pre-clinical studies, five Phase I clinical trials in healthy volunteers and one Phase I clinical trial in subjects with schizophrenia. We have exclusively licensed MIN-101 and a number of back-up compounds from MTPC. MTPC has retained commercialization rights to MIN-101 in most of Asia.  The recently completed development of the once a day formulation will be used in the Phase IIb clinical trial of MIN-101 of approximately 234 subjects in Europe, which is scheduled to enroll over the last three quarters of 2015.

Background of the Disease

Schizophrenia is a chronic, severe and debilitating mental disease where patients suffer from positive, negative and cognitive symptoms. “Positive” symptoms in patients are psychotic behaviors not typically seen in healthy people, including hallucinations, delusions, agitation and thought and movement disorders. “Negative” symptoms are disruptions to normal emotions and behaviors that may signal social withdrawal such as mood flatness, lack of pleasure in daily life and the inability to initiate and maintain social interaction. Patients may lack the ability to begin and sustain planned activities, or speak little, even when forced to interact. “Cognitive” symptoms interfere with the patient’s ability to engage in and maintain daily routines and include: difficulty focusing and paying attention, decreased ability to understand information and make decisions, disrupted working memory or speech difficulty. Overall, this lack of cognitive focus has been shown to interrupt “executive function,” making it harder for patients to sustain relationships or employment. In addition, about half of patients with schizophrenia experience sleep disorders, which further exacerbates the positive and negative symptoms of schizophrenia. Sleep disorders include difficulty in falling asleep, staying awake or poor sleep quality.

Symptoms such as hallucinations and delusions usually begin in late adolescence or early adulthood, and patients may first present with symptoms between the ages of 15 and 30. Genetic and environmental factors are believed to contribute to the disease, and patients with schizophrenia have been observed to have physical differences in brain chemistry and structure. The symptoms of schizophrenia are important for selecting treatment options and may predict the long-term health and well-being of the patient.

Positive symptoms are often experienced periodically in an individual with schizophrenia while negative symptoms persist chronically throughout an individual’s lifetime and increase with severity over time. Patients with negative symptoms often have a projected outcome worse than those suffering from positive symptoms, particularly those with persistent chronic negative symptoms. This is because patients suffering from negative symptoms often do not recognize they need help and therefore do not seek treatment.

According to Datamonitor, 4.3 million patients suffered from schizophrenia in 2014 in the United States and the five major European Union markets and the number of patients is expected to steadily increase in line with population growth. Patients with predominantly negative symptoms represented 48% of the overall patient population in 2012 within the United States and the five major European Union markets. In addition, 80% of the overall patient population in 2012 within the United States and the five major European Union markets suffered from cognitive impairment. Further, approximately half of the number of patients with schizophrenia, experience sleep disorders, which further exacerbates positive and negative symptoms of schizophrenia. Datamonitor estimated schizophrenia-specific sales revenue of antipsychotic drugs across the United States and the five major European Union markets was $4.5 billion in 2014. It is expected that growth of the schizophrenia sales market from 2014 to 2021 will be heavily dependent on pipeline products.

Current Treatment Options and Limitations of Current Therapy

Patients are usually first diagnosed with schizophrenia in conjunction with the onset of positive symptoms, such as hallucinations or delusions. Prescribed treatments are typically either “first-generation” antipsychotic medication or “second-generation” atypical antipsychotics designed to trigger immediate symptom relief by suppressing dopamine receptor activity. Both types of medication are reasonably effective at managing the periodic nature of positive symptoms, but many patients experience significant side effects and adverse events, such as sedation, involuntary movements, prolactin increase, metabolic syndrome, cognitive impairment, sleep disorders and weight gain which can further exacerbate the negative symptoms of the disease. Therapies currently approved for treatment of schizophrenia focus primarily on treating positive symptoms.  No current treatments are specifically approved for treating negative or cognitive symptoms.

While “first-generation” antipsychotic medications, such as Thorazine and Largactil (chlorpromazine) and Haldol (haloperidol), can be effective against positive symptoms in acute cases, there have been concerns about the side effects causing atypical involuntary muscle contractions, leading to motion disorders, such as involuntary movements, or extrapyramidal syndrome, inability to initiate movement, or akinesia, a state of agitation or restlessness, or akathisia. Additional side effects often seen with these treatments include sedation, nausea and tremors. In the United States, according to Datamonitor, it is estimated that approximately 25% of patients receive first-generation antipsychotics as first-line therapy. They are also used more frequently in treatment-resistant patients.