Class Action Alleges Minerva Neurosciences Misled Stockholders About Clinical Trials for Schizophrenia Drug Candidate

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A proposed class action claims Minerva Neurosciences stockholders were misled by the company as to the outcome of clinical trials for a schizophrenia drug candidate and injured financially when stock prices fell upon the revelation that a new drug application would not likely be approved by the FDA.

The timeline in the 34-page lawsuit begins with the May 2017 announcement of the purportedly successful Phase 2b trial of Minerva’s lead drug candidate roluperidone, or MIN-101. According to the case, Minerva announced that the drug, which was being developed to treat negative symptoms in patients with schizophrenia, would proceed to a Phase 3 trial following a successful “end-of-Phase 2” meeting with the FDA.

In a press release, Minerva’s CEO represented that the Phase 3 trial design would be similar to that of Phase 2b and that positive data from both trials “may form the basis for the future submission of a New Drug Application for [roluperidone] with the FDA.” The lawsuit argues, however, that the individual defendant’s statements regarding the FDA’s feedback were “materially misleading” in that the agency did not agree that positive data from the Phase 2b trial could form the basis of an NDA, or that the Phase 3 trial was well-designed.

Over the next three years, the defendants continued to mislead stockholders concerning the possibility of an NDA based on the results of roluperidone’s clinical trials and thus artificially inflated the company’s stock price, the case avers.

In May 2020, Minerva released the results of its Phase 3 trial, which reportedly indicated that the doses of roluperidone given to patients “were not statistically significantly different from a placebo at Week 12 on the primary endpoint . . . or the key secondary endpoint,” the suit says. 

“In other words, the Phase 3 clinical trial failed,” the complaint states.

On this news, Minerva’s stock price dropped from $13.47 per share on May 28 to a closing price of $3.71 per share on May 29, 2020, according to the suit.

Per the complaint, Minerva’s CEO told investors on a November 2 earnings call that the company would soon meet with the FDA to discuss whether combined data from the Phase 2b and Phase 3 trials could form the basis of an NDA for roluperidone, adding that Minerva was “extremely confident” the FDA would find the trials had produced “very compelling data.”

On December 1, 2020, however, Minerva issued a press release before the markets opened in which the company revealed that the FDA had advised that the Phase 2b study “is problematic” because it did not use the commercial formulation of roluperidone and was conducted solely outside the U.S., the case says. Moreover, the agency commented that the Phase 3 data “does not appear to be capable of supporting substantial evidence of effectiveness,” and that an NDA based on combined data from the two studies “would be highly unlikely to be filed” and lead to “substantial review issues” at a minimum, according to the case.

In response, the suit says, Minerva’s stock price plummeted a whopping 25.7 percent in one day, injuring stockholders.

The full complaint, which looks to represent investors who purchased or otherwise acquired Minerva common stock between May 15, 2017 and November 30, 2020, can be read below.

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