Minerva Neurosciences
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM TOCommission File Number 001-36517 Minerva Neurosciences, Inc.(Exact name of Registrant as specified in its Charter) Delaware 26-0784194(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 1601 Trapelo Road, Suite 286Waltham, MA 02451(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code: (617) 600-7373 Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $0.0001 Per Share; Common Stock traded on the Nasdaq Global MarketSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. YES ☒ NO ☐Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 ofthis chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best ofRegistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒The aggregate value of the Company’s Common Stock held by non-affiliates of the Company was approximately $271.1 million as of June 29, 2018, when the last reported salesprice was $8.25 per share.The number of shares of Registrant’s Common Stock outstanding as of March 7, 2019 was 39,025,471.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s Definitive Proxy Statement relating to the 2019 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A with the Securities andExchange Commission are incorporated by reference into Part III of this Report. Such proxy statement will be filed with the Securities and Exchange Commission not later than 120days following the end of the Registrant’s fiscal year ended December 31, 2018.  MINERVA NEUROSCIENCES, INC.TABLE OF CONTENTS Page PART I. 3 Item 1. Business 3 Item 1A. Risk Factors 23 Item 1B. Unresolved Staff Comments 53 Item 2. Properties 53 Item 3. Legal Proceedings 53 Item 4. Mine Safety Disclosures 53 PART II. 54 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54 Item 6. Selected Financial Data 54 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 63 Item 8. Financial Statements and Supplementary Data 64 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 65 Item 9A. Controls and Procedures 65 Item 9B. Other Information 65 PART III. 66 Item 10. Directors, Executive Officers and Corporate Governance 66 Item 11. Executive Compensation 66 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 66 Item 13. Certain Relationships and Related Person Transactions and Director Independence 66 Item 14. Principal Accountant Fees and Services 66 PART IV. 67 Item 15. Exhibits and Financial Statement Schedules 67 Exhibit Index 67 Item 16. Form 10-K Summary 70 Signatures 71 All trademarks, trade names, service marks, and copyrights appearing in this Annual Report on Form 10-K are the property of their respective owners. 2 This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, asamended. These forward-looking statements reflect our plans, estimates and beliefs. These statements involve known and unknown risks, uncertainties andother factors that may cause our actual results, performance or achievements to be materially different from any future results, performances orachievements 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 similarexpressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and arebased on assumptions and subject to risks and uncertainties. Because of these risks and uncertainties, the forward-looking events and circumstancesdiscussed 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 ourestimates and assumptions only as of the date of this document. You should read this document with the understanding that our actual future results may bematerially different from what we expect. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-lookingstatements contained in this report, whether as a result of new information, future events or otherwise.Part I ITEM 1.BusinessOverviewWe are a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patientssuffering from central nervous system (“CNS”), diseases. Leveraging our scientific insights and clinical experience, we have acquired or in-licensed fourdevelopment-stage proprietary compounds that we believe have innovative mechanisms of action and therapeutic profiles that potentially address the unmetneeds of patients with these diseases.Our product portfolio and potential indications include: roluperidone (also known as MIN-101) for the treatment of negative symptoms in patients withschizophrenia; seltorexant (also known as MIN-202 or JNJ-42847922), which we are co-developing with Janssen Pharmaceutica NV, or Janssen, for thetreatment of insomnia disorder and adjunctive treatment of Major Depressive Disorder, or aMDD; MIN-117 for the treatment of MDD; and MIN-301 for thetreatment of Parkinson’s disease. We believe our product candidates have significant potential to improve the lives of a large number of affected patients andtheir families who are currently not well-served by available therapies. According to Datamonitor, an independent market research firm, in 2018approximately 2.9 million people suffered from schizophrenia, 27.9 million suffered from MDD and 2.0 million suffered from Parkinson’s disease in theUnited States (“U.S.”), Japan and the five major European Union (“EU”) markets of France, Germany, Italy, Spain and the United Kingdom. Insomnia as asymptom affects up to 50% of the general population, while insomnia with significant daytime consequences is estimated to affect 7% to 13% of thepopulation worldwide and is recognized as a major public health issue.Our StrategyOur strategy is to develop and commercialize first-in-class products that address critical unmet medical needs in the CNS therapeutic area. We are pursuingthis strategy based on the following principles: selection of differentiated products with novel mechanisms of action that target therapeutic areas of highunmet need and significant disease burden; attention to patient safety and compliance; scientific rigor applied to patient selection and clinical trial conduct;engagement of highly trained clinical trial investigators; incorporation of patient and caregiver insights to drive clinical advancements; and integrity. Withthe experience and knowledge base of our clinicians and physicians, we have generated substantive data from randomized, double blind, placebo-controlledtrials that support the clinical advancement of these products in defined patient populations and in multiple regulatory jurisdictions. In summary, keyelements of our strategy are to: •Identify, acquire and develop differentiated products with innovative mechanisms of action based on biological and clinical insights into theunmet needs of patients; •Leverage the randomized, double-blind, placebo-controlled data from completed trials to advance the clinical development of our productcandidates in multiple regulatory jurisdictions; •Prepare for the commercialization of our lead product, roluperidone, which will potentially be the first product approved to treat negativesymptoms in patients with schizophrenia and, in the longer term as a potential treatment for other neuro-degenerative brain disorders inwhich negative symptoms represent a significant debilitating, unmet need;3 •Selectively explore collaborations with leading pharmaceutical companies to maximize the value of our current product candidate portfolio,particularly in connection with pivotal clinical trials and subsequent regulatory review, approval and commercialization; •Apply our management team’s expertise and current intellectual property portfolio to identify and explore additional indications toinvestigate with our current portfolio of compounds and to acquire additional product candidates.Our HistoryIn November 2013, Cyrenaic Pharmaceuticals, Inc., or Cyrenaic, and Sonkei Pharmaceuticals, Inc., or Sonkei, merged, and the combined company wasrenamed Minerva Neurosciences, Inc. Cyrenaic had been incorporated in 2007 and had exclusively licensed roluperidone and other compounds with asimilar structure and intended purpose from Mitsubishi Tanabe Pharma Corporation, or MTPC. Sonkei had been incorporated in 2008 and had exclusivelylicensed MIN-117 from MTPC. We saw the merger as an opportunity to better serve underserved patient populations through combining a portfolio ofpromising product candidates targeting multiple CNS diseases. As a result of the merger, we have the rights to develop and commercialize roluperidone andMIN-117 globally, excluding most of Asia, where MIPC has retained commercialization rights.We further expanded our product candidate portfolio in February 2014 by acquiring the shares of Mind-NRG Sarl, or Mind-NRG, which had exclusive rightsto develop and commercialize MIN-301 globally. In addition, in February 2014 we entered into a co-development and license agreement with Janssen, one ofthe Janssen Pharmaceutical Companies of Johnson & Johnson. Pursuant to this agreement, subsequently amended in June 2017, we are co-developingseltorexant and have the right to commercialize this compound in the European Union, Switzerland, Liechtenstein, Iceland and Norway, or the MinervaTerritory, subject to royalty payments to Janssen, with Janssen having commercialization rights outside of the Minerva Territory, subject to royalty paymentsto us. We have not received regulatory approvals to commercialize any of our product candidates, and we have not generated any revenue from the sales or licenseof our product candidates. We have incurred significant operating losses since inception. We expect to incur net losses and negative cash flow from operatingactivities for the foreseeable future in connection with the clinical development and the potential regulatory approval, infrastructure development andcommercialization of our product candidates.4 Our Pipeline of Advanced Clinical-Stage Programs Roluperidone (MIN-101)IntroductionRoluperidone is a compound that has been shown to block serotonin receptors and sigma receptors, two receptors in the brain that are involved in theregulation of mood, cognition, sleep and anxiety. We are developing roluperidone to treat patients with schizophrenia. Roluperidone has been designed toblock 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 associated with antipsychotic treatments, can be minimized. Additionally, blocking5-HT2A promotes slow wave sleep, a sleep stage often disrupted in patients with schizophrenia. Roluperidone has also been designed to block a specificsubtype of sigma receptor called sigma2, which is involved in movement control, psychotic symptom control and learning and memory. Blocking sigma2also increases calcium levels in neurons in the brain, which can improve memory. Recent pre-clinical findings provide evidence of the effect of roluperidoneon Brain-Derived Neurotrophic Factor (“BDNF”), which has been associated with neurogenesis, neuroplasticity, neuroprotection, synapse regulation,learning and memory.We believe the scientifically supported and innovative mechanisms of action of roluperidone may potentially address the unmet needs of schizophrenicpatients, which include negative symptoms and cognitive impairment, without the side effects of existing therapies. Negative symptoms are lifelongdebilitating symptoms and include: asociality, or the lack of motivation to engage in social interactions; anhedonia, or the inability to experience positiveemotions; alogia, or failure to engage in normal conversation; avolition, or loss of energy and interest in activities; and blunted affect, or diminishedemotional expression. We plan to seek approval of5 roluperidone initially as a first line treatment of negative symptoms in patients diagnosed with schizophrenia, and we also may study its use to treat allaspects of the disease, including positive symptoms and relapse prevention. We believe that roluperidone, if approved, could treat the majority of patientsdiagnosed with schizophrenia. An estimated 69% of patients diagnosed with schizophrenia have negative symptoms, with at least 42% of patients diagnosedwith schizophrenia having prominent negative symptoms. Beyond schizophrenia, we believe roluperidone may possess therapeutic utility in brain disorderswhere negative symptoms are a significant unmet need and a core feature of the disease associated with a range of poor clinical outcomes. Clinical Development Phase 3 Clinical TrialIn December 2017, the first patient was screened in the pivotal Phase 3 clinical trial of roluperidone (Study MIN-101C07) as monotherapy for negativesymptoms in patients diagnosed with schizophrenia. The trial is a multicenter, randomized, double-blind, parallel-group, placebo-controlled, 12-week studyto evaluate the efficacy and safety of 32 milligrams, or mg, and 64 mg of roluperidone in adult patients with negative symptoms of schizophrenia. The 12-week study will be followed by a 40-week, open-label extension period during which patients on drug will continue receiving their original dose andpatients on placebo will receive either 32 mg or 64 mg of roluperidone. The approximately 500 patients we expect to enroll in this trial at clinical sites in the U.S. and Europe will be initially randomized equally to receive one ofthe two doses of roluperidone or placebo for 12 weeks. Thereafter, all patients will continue treatment with roluperidone for the 40-week extension period ifthey elect to enter that period.We expect the completion of enrollment during the first half of 2019 and top-line results from the 12-week, double-blind period in mid-2019. The primary endpoint of this trial will be improvement in negative symptoms in patients treated with roluperidone compared to placebo as measured by thechange in the Positive and Negative Syndrome Scale, or PANSS, Marder negative symptoms factor score, or NSFS, over the 12-week double-blind treatmentperiod. To support the use of the Marder NSFS as the primary endpoint in the Phase 3 study, it was applied to the Phase 2b PANSS data, and the resultinganalysis confirmed the robustness of the effect of roluperidone for the two tested doses. The key secondary endpoint will be the effect of roluperidonecompared to placebo as measured by the Personal and Social Performance, or PSP, total score over the same period. Additional secondary endpoints will bethe effect of roluperidone compared to placebo on the Clinical Global Impression of Severity, or CGI-S, score and safety and tolerability.Patients admitted into the trial must have a documented diagnosis of schizophrenia for at least one year and be symptomatically stable for at least 6 monthswith moderate to severe negative symptoms (>20 on the PANSS negative symptom subscale) and stable positive symptoms. Patients without moderate tosevere symptoms of excitement/hyperactivity, suspiciousness/persecution, hostility, uncooperativeness, or poor impulse control will be recruited. We believethese eligibility criteria represent the real-world patient population who may benefit when the drug is used in clinical practice. In addition, patients treatedwith psychotropic agents will need to undergo a wash-out period of a few days before receiving study drug. These parameters were applied in screening thepopulation treated in the Phase 2b trial. Chemistry, Manufacturing and Controls programThe chemistry, manufacturing and controls (“CMC”) scale-up program for roluperidone is ongoing to ensure consistency between the drug batches to be usedduring Phase 3 testing and those that will be available for potential marketing and commercialization pending the completion of our Phase 3 trial andsubsequent regulatory submission and review of a New Drug Application (“NDA”) for roluperidone. The CMC program requires validation of all aspects ofthe manufacturing processes required to result in a drug product that consistently meets approved quality standards.Dose Escalation StudyWe have completed a prospective, double-blind, placebo-controlled, randomized single-escalating dose study in healthy subjects to evaluate theinvestigational drug roluperidone as monotherapy administered at nine ascending doses (16, 32, 64, 96, 128, 160, 192, 224 and 256 mg). The highest dosetested is 4 multiples of the highest dose (64 mg) being used in the ongoing Phase 3 trial.The primary objectives of the study included the evaluation of the pharmacokinetics, dose-proportionality and the effect of plasma concentrations ofroluperidone and its main metabolites on pharmacodynamic parameters using electrocardiogram (“ECG”) Fridericia-corrected QT interval (“QTcF”), ameasurement of cardiac function. Secondary objectives included evaluation of safety and6 tolerability. An additional objective was to provide an estimate of the supra-therapeutic dose to be used in the thorough QT study planned as part of theNDA. The trial included a total of 90 subjects. 72 received 9 different doses of roluperidone, and 18 received placebo. All subjects who were dosed completed thestudy as planned except for one male subject who received placebo and subsequently withdrew his consent.Data from this trial demonstrated the following: •The pharmacokinetics of roluperidone and its metabolites were dose proportional. •No QTcF duration > 480 milliseconds (“msec”) or increases > 60 msec compared to baseline values were observed in any subject. •160 mg was the only roluperidone dose to show an adjusted QTcF mean increase from baseline of 10.7 msec. All other doses showed meansbelow 10 msec that ranged from -1.3 to 5 msec. •No significant change in repolarization was observed. •Two subjects (11%) in the placebo group and nine subjects (13%) in the roluperidone group reported adverse events that were mild to moderatein severity and resolved without sequelae. •Doses up to 160 mg or 2.5 multiples of the highest dose being tested in the ongoing Phase 3 trial had no effect on any cardiac safetyparameters. •Slight but not clinically relevant increases in heart rate were observed in the placebo group and some of the roluperidone doses. •No serious adverse events were reported.We believe these findings suggest an expanded therapeutic window and a significantly improved safety margin for roluperidone. They provide furtherevidence that the formulation being used in the Phase 3 trial has a significantly reduced maximum concentration (“Cmax”) of the BFB-520 metabolite whencompared to the formulation used in the Phase 2b trial, thereby reducing the potential for transient QTc increases at the doses currently tested in the Phase 3trial. Furthermore, we believe these data suggest the potential for future testing of roluperidone in schizophrenic patients with an exacerbation of psychosis athigher doses than those being used in the Phase 3 trial.Brain-Derived Neurotrophic Factor (“BDNF”) FindingsWe have completed a pre-clinical study that provides evidence of the effect of roluperidone on BDNF. BDNF is the most widely distributed member ofneurotrophins in the brain and has been associated with neurogenesis, neuroplasticity, neuroprotection, synapse regulation, learning and memory. Itsinvolvement in schizophrenia has also been described. In this study, after three days of administration, roluperidone was observed to significantly increasethe release of BDNF in cultured brain hippocampal neurons in a dose-dependent manner. We believe these findings, along with clinical results, may suggestthe potential of roluperidone to change the overall course of schizophrenia.The Journal of Clinical Psychiatry PublicationThe Journal of Clinical Psychiatry has published online results demonstrating cognitive improvements in patients with schizophrenia treated withroluperidone (Cognitive Effects on MIN-101 in Patients with Schizophrenia and Negative Symptoms: Results from a Randomized Controlled Trial). Theresults also demonstrated that cognitive improvements correlate with previously reported improvements in negative symptoms. This is the third peer-reviewed publication of Phase 2b data with roluperidone.MIN-117IntroductionWe are developing MIN-117 to treat patients suffering from moderate to severe MDD with anxiety. Patients suffering from MDD experience feelings ofsadness, loss of interest or pleasure in activities, changes in sleep such as insomnia, fatigue and diminished ability to concentrate that interfere with theirability to carry out and enjoy once-pleasurable activities. While suicide is the leading cause of death in those with MDD, other factors, such as changes inimmune function and susceptibility to disease, can also lead to early mortality.We believe MIN-117 has the potential to address limitations of existing therapies, such as slow onset of action and poor safety and tolerability, without manyof the typical side effects associated with currently approved therapies. The pharmacological effects of7 MIN-117 are related to serotonin and dopamine, two neurotransmitters in the brain. MIN-117 is meant to block a specific subtype of serotonin receptor called5-HT1A. When 5-HT1A is blocked, anxiety and mood can be regulated. In addition, MIN-117 is meant to prevent the reuptake of serotonin and dopamine,which increases the amount of serotonin and dopamine in the brain, which is tied to an improvement in mood in individuals suffering from MDD. MIN-117 isalso meant to modulate the levels of Alpha-1a and 1b, which further modulates serotonin and dopamine.Based upon clinical and non-clinical studies completed to date, we believe MIN-117 may demonstrate a safety profile comparable to placebo without manyof the typical side effects of current MDD treatments, including cognitive impairment, sexual dysfunction, sleep disorders and weight gain. As part of ourlicense agreement with MTPC, we may develop, sell, and import products based on the MIN-117 compound globally, excluding most of Asia.Clinical DevelopmentPhase 2b TrialWe initiated a Phase 2b trial in MDD in the U.S. and Europe on April 9, 2018. The primary objective of the trial is to evaluate the efficacy of two fixed dosesof MIN-117, 5.0 mg and 2.5 mg daily, compared with placebo in reducing the symptoms of major depression as measured by the change in the Montgomery-Asberg Depression Rating Scale (“MADRS”) total score over six weeks of treatment. Secondary objectives include: (1) assessment of the change frombaseline in symptoms of anxiety using the Hamilton Anxiety Scale (“HAM-A”); (2) the change in severity of illness using the Clinical Global Impression ofSeverity Scale (“CGI-S”) and Clinical Global Impression of Improvement Scale (“CGI-I”); and (3) safety over six weeks of treatment.The study is recruiting adults with a diagnosis of moderate or severe MDD with anxious distress and without psychotic features. Based upon previous clinicalobservations, we believe that patients with MDD who also have symptoms of anxiety may benefit from treatment with MIN-117.Approximately 324 patients are expected to be enrolled in the U.S. and Europe. Patients will be randomized to one of three arms, including placebo and thetwo dosage arms, in a 2:1:1 ratio, resulting in approximately 162 patients in the placebo group and 81 patients in each of the two MIN-117 treatment groups.The study design includes a screening phase of up to three weeks, a six-week double-blind treatment phase and a two-week post-study follow-up period. Topline results are expected in the first half of 2019.New Patent Application Related to PainWe have filed a U.S. patent application for MIN-117 to treat pain. Pre-clinical rat models submitted in the patent application included peripheralmotoneuropathy, inflammatory pain and chemotherapy-induced peripheral neuropathic pain. Findings in these models showed that MIN-117 restoredapproximately 60 percent of the nociceptive pain threshold after peripheral motoneuropathy or inflammatory pain and significantly reduced, in a dose-dependent manner, chemotherapy-induced peripheral neuropathic pain.These results suggest that MIN-117 may be a candidate for study in the treatment of diseases with chronic pain symptoms and may have the potential toaddress the urgent need for non-opioid therapeutic options for the treatment of pain. Furthermore, the currently available treatments for chronic pain areoften not satisfactory and may be associated with adverse reactions, tolerance, dependence and reductions in the quality of life for patients.Seltorexant (MIN-202)IntroductionSeltorexant is an innovative selective orexin 2 receptor antagonist we are co-developing with Janssen for the treatment of insomnia and aMDD. Insomnia isthe repeated difficulty with sleep initiation, maintenance or quality that occurs despite adequate time and opportunity for sleep, resulting in daytimeimpairment. Insomnia can be the primary condition for patients or a secondary symptom of, and contributor to, another medical or psychiatric condition, suchas MDD or schizophrenia.In the brain, the orexin system is involved in the control of several key functions, including metabolism and wakefulness. Seltorexant seeks to inhibit theactivity of the neurons that promote wakefulness by selectively blocking the orexin 2 receptor. Rather than making an individual sleepier as is the case withmany commercially available therapies that mediate their effect via the Gamma-Aminobutyric Acid (“GABA”) neurotransmitter pathway, blocking the orexin2 receptor reduces the level of the neurotransmitters that signal the brain to maintain vigilance and wakefulness, which can be helpful for patients withinsomnia.8 We are co-developing seltorexant with Janssen and own the exclusive rights to develop and commercialize the compound in the Minerva Territory subject toroyalty payments to Janssen and we have the right to receive royalties on any sales outside the Minerva Territory.Amendment to Co-Development and License Agreement with JanssenIn June 2017, we entered into an amendment (the “Amendment”) to the co-development and license agreement with Janssen dated February 13, 2014 (the“Agreement”). The effectiveness of the Amendment was contingent upon approval of its terms by the European Commission and the closing of theacquisition of Actelion Ltd. by affiliates of Janssen. These conditions were subsequently met, and the Amendment became effective on August 29, 2017.Under the Amendment, Janssen has waived its right to royalties on seltorexant insomnia sales in the Minerva Territory. We retain all of our rights toseltorexant, including commercialization of the molecule for the treatment of insomnia and aMDD, which include an exclusive license in the MinervaTerritory, with royalties payable by us to Janssen on seltorexant sales outside of the insomnia indication. Royalties on sales outside of the Minerva Territoryare payable by Janssen to us. Janssen made an upfront payment to us of $30 million upon the effectiveness of the Amendment and agreed to make a $20million payment at the start of a Phase 3 insomnia trial for seltorexant and a $20 million payment when 50% of the patients are enrolled in this trial. Janssenfurther agreed to waive development payments from us until completion of the Phase 2b development milestone. This milestone is referred to as “DecisionPoint 4” and is expected to occur in the second half of 2019. The $30 million payment and $11.2 million in previously accrued collaborative expenses,which were forgiven upon the effective date of the Amendment, are earned and recognized as revenue as the services are performed from the commencementof Phase 3 development to the completion of the development activities using the proportional performance method. The $30 million payment along withthe $11.2 million in previously accrued collaborative expenses have been included under deferred revenue on our balance sheet at December 31, 2018 andDecember 31, 2017. In connection with the Amendment, we repurchased all of the approximately 3.9 million shares of our common stock previously ownedby Johnson & Johnson Innovation-JJDC Inc. at a per share price of $0.0001, for an aggregate purchase price of approximately $389.As a result of the Amendment, we assumed strategic control of matters relating to the clinical development of seltorexant for insomnia and have no furtherfinancial obligations until after Decision Point 4. After Decision Point 4, both we and Janssen have the right to opt-out of the Agreement.If we opt-out, we collect a royalty on worldwide sales of seltorexant in the single digits with no further obligations to Janssen. If Janssen opts-out, theMinerva Territory would be expanded to include North America and we would pay Janssen royalties on sales of seltorexant outside of the insomniaindication in the single digits.If both parties elect to continue past Decision Point 4 into Phase 3, we would be obligated to fund the clinical trials related to insomnia, receive up to $40million in milestone payments from Janssen, and be responsible for 40% of all costs incurred in the Phase 3 aMDD program. Clinical DevelopmentPhase 2b Trials in MDDA Phase 2b trial of seltorexant as adjunctive therapy to antidepressants is ongoing in adult patients with MDD who have responded inadequately toantidepressant therapy (the “2001 Trial”). The primary objectives of this multi-center, double-blind, randomized, parallel group, placebo-controlled,adaptive-dose finding study are to assess the dose-response relationship and antidepressant effects of up to three doses of seltorexant (10, 20, and 40 mg) andto assess the safety and tolerability of seltorexant compared to placebo. The trial consists of three phases: a screening phase lasting up to four weeks, a six-week double-blind treatment phase and a two-week post-treatment follow-up phase. We plan to enroll approximately 280 patients in the U.S., Europe, Russiaand Japan.A Phase 2b clinical trial comparing seltorexant versus quetiapine as adjunctive therapy is ongoing in patients with MDD who have responded inadequatelyto antidepressant therapy (the “2002 Trial”). The primary objective of this multi-center, double-blind, randomized, flexible-dose, parallel-group study is toassess the efficacy of flexibly dosed seltorexant compared to flexibly dosed quetiapine as adjunctive therapy to a baseline antidepressant drug in delayingtime to all-cause discontinuation of study drug over a 6-month treatment period. Time to all-cause discontinuation is defined as the number of days fromadministration of the first dose of study drug to administration of the last dose of study drug. The trial consists of three phases: a screening phase lasting up tofour weeks, a six-month double-blind treatment phase and a two-week follow-up phase. Approximately 100 patients 18 to 64 years of age are planned to berandomized in the U.S. to receive either flexibly dosed seltorexant, 20 mg or 40 mg, or flexibly dosed quetiapine XR, 150 mg or 300 mg. Subjects willcontinue to take their baseline antidepressant therapy of either a selective serotonin reuptake inhibitor (“SSRI”) or a serotonin-norepinephrine reuptakeinhibitor (“SNRI”) at the same dose throughout the screening, double-blind and follow-up phases.9 Enrollment in the 2002 trial was temporarily suspended during the first quarter of 2018 due to a drug packaging issue. This issue has been resolved, andenrollment was restarted in the second quarter of 2018. We have completed preclinical fertility studies in female rats to assess the potential relevance toexposing women of child bearing potential to seltorexant and have requested regulatory clearance to lift the ban on enrolling these women.We expect the top-line results from the 2001 Trial in MDD in the second quarter of 2019 and top-line results from the 2002 Trial in MDD in mid-2019.Phase 2b Trial in Insomnia DisorderA Phase 2b clinical trial of seltorexant is ongoing in patients with insomnia disorder (the “2005 Trial”). This multicenter, double-blind, randomized, parallel-group, active- and placebo-controlled dose finding study is designed to assess the efficacy and safety of seltorexant in both adult and elderly subjects withinsomnia disorder. The primary objective of this trial is to assess the dose-response of three doses of seltorexant (5, 10 and 20 mg daily) compared to placeboon sleep onset as measured by the latency to persistent sleep (“LPS”) using polysomnography (“PSG”). The key secondary objective is to assess the dose-response of these three doses compared to placebo on wake after sleep onset (“WASO”) over the first six hours using PSG. In addition, the effects ofseltorexant on sleep and cognition will be compared to those effects of zolpidem to determine potential differences between the compounds.A total of approximately 360 patients 18 to 85 years of age are expected to be randomized in this study at clinical sites in the U.S., EU, and Japan.We expect the top-line results from the 2005 Trial in mid-2019.MIN-301IntroductionWe are developing MIN-301, a soluble recombinant form of the Neuregulin-1b1, or NRG-1b1, protein, for the treatment of Parkinson’s disease andpotentially for other neurodegenerative disorders. We believe MIN-301 has the potential to slow the onset of, and restore the brain tissue damage caused by,the disease. MIN-301 is produced by recombinant technology, which is a type of process that modifies the genetics of a biological organism to cause it toproduce a particular product. MIN-301 is a peptide that contains the extracellular domain of the human neureglin-1 beta 1 protein and is produced using anEscherichia coli organism that is genetically engineered to express this peptide. Once administrated, this peptide binds to a particular receptor, ErbB4, whichproduces certain biological effects. For instance, binding to ErbB4 modulates the levels of certain neurotransmitters such as Gamma-Aminobutyric Acid(“GABA”) and glutamate in the brain, which are often unbalanced in individuals with Parkinson’s disease. Further, ErbB4 promotes oxygenation andmetabolism of neurons and it is involved in the control of brain inflammation, which may indicate that MIN-301 could reverse the damage caused byParkinson’s disease.Current treatments for Parkinson’s disease improve the symptoms of patients, but none have been proven to delay the onset of the disease, slow or prevent theprogression of the disease or reverse its effects. Due to MIN-301’s novel mechanism of action that targets neurological deficits, we believe MIN-301 has thepotential to address these unmet needs of patients and, if approved, may be used as an early-stage monotherapy as well as a complementary therapy toexisting treatments.Pre-clinical DevelopmentResults from a non-human primate study showed that treatment with an analog of MIN-301 resulted in improvements in a range of symptoms associated witha Parkinson’s disease model in primates. The results confirmed the beneficial effects of MIN-301 in non-primate preclinical models. We believe these dataprovide support for advancing MIN-301 into clinical trials for the treatment of Parkinson’s disease in humans. Building upon these data, we are continuing toconduct preclinical studies in preparation for an IND or Investigational Medicinal Product Dossier, or IMPD, filing, with a Phase 1 study expected tocommence thereafter.License AgreementsRoluperidone License Agreement with MTPCWe have entered into a license agreement with MTPC dated as of August 30, 2007, as amended, or the Roluperidone License Agreement. Under the terms ofthe Roluperidone License Agreement, we acquired an exclusive license to the lead compound known as CYR-101 (subsequently renamed MIN-101 androluperidone), and other compounds with a similar structure and intended purpose10 and other data included within the valid claims of certain patents licensed to us under the Roluperidone License Agreement. The license is for world-widerights other than certain countries in Asia, including China, Japan, India and South Korea. We will pay MTPC a tiered royalty for net sales of product by us orany of our affiliates or sublicensees containing the licensed compound at a range of percentages of the high single digits to the low teens depending on netsales of products under the Roluperidone License Agreement. We were also required to make certain milestone payments upon the achievement of certaindevelopment and commercial milestones, potentially up to $57.5 million for roluperidone and up to $59.5 million for additional products.In January 2014, we renegotiated the structure of the license for roluperidone such that we are required to make milestone payments upon the achievement ofone development milestone totaling $0.5 million and certain commercial milestones, which could total up to $47.5 million, in the aggregate, as well as thetiered royalty payments described above. In addition, in the event that we sell the rights to the license, MTPC will be entitled to a percentage of milestonepayments in the low teens and a percentage of royalties received by us in the low double digits. This license agreement has a term of the later of 12 years fromthe launch of the product in each country in our territory, or the expiration of our obligation to pay royalties, upon which we will have a fully paid-up, non-exclusive, perpetual, irrevocable license. Our obligation to pay royalties continues, on a country-by-country basis, until the expiration of the last-to-expirepatent that covers roluperidone in each country in our territory.MIN-117 License Agreement with MTPCSonkei entered into a license agreement with MTPC dated September 1, 2008, as amended, or the MIN-117 License Agreement. Under the terms of the MIN-117 License Agreement, we acquired an exclusive license to the lead compound known as SON-117 (subsequently renamed MIN-117) and other dataincluded within the valid claims of certain patents licensed to us under the MIN-117 License Agreement. Sonkei paid MTPC an initial license fee of $0.5million. The license is for world-wide rights other than certain countries in Asia, including China, Japan, India and South Korea. We will pay a tiered royaltyfor net sales of product by it or any of its affiliates or sublicensees containing the licensed compound ranging from the high single digits to the low teensdepending on net sales of products under the MIN-117 License Agreement. Through the date of the agreement, as amended, we were required to makepayments up to $57.5 million upon the achievement of certain commercial milestones.In January 2014, we renegotiated the structure of the license for MIN-117 such that we are required to make certain milestone payments upon theachievement of certain commercial milestones up to $47.5 million. In addition, in the event that we sell the rights to the license, MTPC will be entitled to apercentage of milestone payments in the low teens and a percentage of royalties received by us in the low double digits. This license agreement has a term ofthe later of 10 years from the launch of the product in each country in our territory, or the expiration of our obligation to pay royalties, upon which we willhave a fully paid-up, non-exclusive, perpetual, irrevocable license. Our obligation to pay royalties continues, on a country-by-country basis, until theexpiration of the last-to-expire patent that covers MIN-117 in each country in our territory. In April 2015, we amended the diligence milestone obligationunder the license agreement for MIN-117 to extend the deadline from April 30, 2015 to June 30, 2015 to begin enrollment in a Phase 2a or Phase 2b studywith MIN-117 in patients suffering major mood disorders. As consideration for the two-month extension, we paid MTPC, and recorded an expense for,$80,000 in the year ended December 31, 2015. We met the enrollment milestone obligation in June 2015.Seltorexant Co-Development and License Agreement with JanssenOn February 13, 2014, we signed a co-development and license agreement (the “Agreement”) with Janssen, which became effective upon completion of ourinitial public offering and the payment of a $22.0 million license fee. Under the Agreement, Janssen, the licensor, granted us an exclusive license, with theright to sublicense, in the Minerva Territory, under (i) certain patent and patent applications to sell products containing any orexin 2 compound, controlledby the licensor and claimed in a licensor patent right as an active ingredient and (ii) seltorexant for any use in humans. In addition, upon regulatory approvalin the Minerva Territory (and earlier if certain default events occur), we will have rights to manufacture seltorexant, also known as JNJ-42847922. We havegranted to the licensor an exclusive license, with the right to sublicense, under all patent rights and know-how controlled by us related to seltorexant to sellseltorexant outside the Minerva Territory. In consideration of the licenses granted on July 7, 2014, we made a license fee payment of $22.0 million, whichwas included as a component of research and development expense in 2014.The Agreement contains certain provisions, which include our ability to opt-out of the Agreement upon completion of certain milestones. If we elect toparticipate in the development program through to the potential commercial approval of seltorexant we will pay a quarterly royalty percentage to the licensorin the high single digits on aggregate net sales for seltorexant products sold by us, our affiliates and sublicensees in the Minerva Territory. The licensor willpay a quarterly royalty percentage to us in the high single digits on aggregate net sales for seltorexant products sold by the licensor outside the MinervaTerritory.We account for the Agreement as a joint risk-sharing collaboration in accordance with ASC 808, “Collaborative Arrangements”. Payments between us andthe licensor with respect to each party’s share of seltorexant development costs that have been incurred11 pursuant to the joint development plan are recorded within research and development expenses or general and administrative expenses, as applicable, in theaccompanying consolidated statements of operations due to the joint risk-sharing nature of the activities. We have included zero in accrued collaborativeexpenses as of December 31, 2018 and December 31, 2017, related to the Agreement. In the 12 months ended December 31, 2018 and 2017, we paid zero and$2.5 million, respectively, related to development activities under the Agreement.On July 6, 2016, we and Janssen agreed that “Decision Point 2” had been reached as defined under the Agreement. As neither party exercised their right towithdraw from the Agreement, we paid Janssen $3.5 million and have incurred direct expenses of $0.3 million related to development activities under thecurrent phase of development. During the 12 months ended December 31, 2018 and 2017, we recorded expenses of zero and $11.2 million, respectively, forcertain development activities in accordance with the terms of the Agreement.In June 2017, we entered into an amendment (“the Amendment”) to the co-development and license agreement with Janssen dated February 13, 2014 (the“Agreement”). The effectiveness of the Amendment was contingent upon approval of its terms by the European Commission and the closing of theacquisition of Actelion Ltd. by affiliates of Janssen. These conditions were subsequently met, and the Amendment became effective on August 29, 2017.Under the Amendment, Janssen has waived its right to royalties on seltorexant insomnia sales in the Minerva Territory. We retain all of our rights toseltorexant, including commercialization of the molecule for the treatment of insomnia and as an adjunctive therapy for MDD, which include an exclusivelicense in the Minerva Territory, with royalties payable by us to Janssen on seltorexant sales outside of the insomnia indication. Royalties on sales outside ofthe Minerva Territory are payable by Janssen to us. Janssen made an upfront payment to us of $30 million upon the effectiveness of the Amendment andagreed to make a $20 million payment at the start of a Phase 3 insomnia trial for seltorexant and a $20 million payment when 50% of the patients are enrolledin this trial. Janssen further agreed to waive development payments from us until completion of the Phase 2b development milestone. This milestone isreferred to as “Decision Point 4” and is expected to occur in the second half of 2019. The $30 million payment and $11.2 million in previously accruedcollaborative expenses, which were forgiven upon the effective date of the Amendment, are earned and recognized as revenue as the services are performedfrom the commencement of Phase 3 development to the completion of the development activities using the proportional performance method. The $30million payment along with the $11.2 million in previously accrued collaborative expenses have been included under deferred revenue on our balance sheetat December 31, 2018 and December 31, 2017. In connection with the Amendment, we repurchased all of the approximately 3.9 million shares of ourcommon stock previously owned by Johnson & Johnson Innovation-JJDC Inc. at a per share price of $0.0001, for an aggregate purchase price ofapproximately $389.As a result of the Amendment, we assumed strategic control of matters relating to the clinical development of seltorexant for insomnia and have no furtherfinancial obligations until after Decision Point 4. After Decision Point 4, both we and Janssen have the right to opt-out of the Agreement.If we opt-out, we collect a royalty on worldwide sales of seltorexant in the single digits with no further obligations to Janssen. If Janssen opts-out, theMinerva Territory would be expanded to include North America and we would pay Janssen royalties on sales of seltorexant outside of the insomniaindication in the single digits.If both parties elect to continue past Decision Point 4 into Phase 3, we would be obligated to fund the clinical trials related to insomnia, receive up to $40million in milestone payments from Janssen, and be responsible for 40% of all costs incurred in the Phase 3 MDD program.CompetitionRoluperidone: Competition in the Pharmaceutical Market for the Treatment of SchizophreniaCurrent drug therapies for the treatment of schizophrenia mainly target the positive symptoms of the disease. When patients present positive symptoms andrequire treatment, they are typically given either conventional “first-generation” antipsychotic medication, such as GlaxoSmithKline’s Thorazine Sanofi-Aventis’ Largactil (chlorpromazine) and Johnson & Johnson’s Haldol (haloperidol), or second-generation “atypical antipsychotics,” such as Novartis’Clozaril (clozapine), Johnson & Johnson’s Risperdal (risperidone), AstraZeneca’s Seroquel (quetiapine), Eli Lilly’s Zyprexa (olanzapine) and Bristol-MyersSquibb’s Abilify (aripiprazole).Both types of existing therapies have limited ability to improve negative symptoms and cognitive symptoms. In addition, existing therapies have extensiveside effects such as weight gain, metabolic syndrome, sedation, nausea, movement disorders, restlessness, insomnia, impairment of cognitive skills, andprolactin increase. Since schizophrenia has a wide range of symptoms, multiple therapeutics are often prescribed in an attempt to address all aspects of thedisease, compounding these side effects.12 Given the focus of currently approved drug therapies for positive symptoms and their side effect profiles, we believe these therapies are unlikely to bedirectly competitive with roluperidone, which is intended to target primarily negative symptoms and cognitive impairment. However, new drug therapies inaddition to roluperidone are being developed to address the limitations of current therapies. Several new pharmacological approaches have beeninvestigated. One targets a neurotransmitter called glutamate and the other targets a neurotransmitter called nicotine. Glutamate is the most predominantneurotransmitter system in maintaining the brain in an active state and is involved in maintaining accurate vigilance, attention and contributing to somecognitive skills. Nicotine is among the most predominant neurotransmitter system involved in learning and some other cognitive skills. On September 22,2017, Allergan announced it had received a Refusal to File letter from the FDA regarding their antipsychotic product, Vraylar. The FDA, according toAllergan’s press-release, determined that the supplemental NDA (“sNDA”) for the treatment of negative symptoms was not sufficiently complete to permit asubstantive review. Allergan has stated that the company is in the process of planning a meeting with the FDA, to respond to the issues, and to seekclarification of what information will be required. Specific compounds under late-stage development that include negative symptoms as a target include Acadia Pharmaceuticals’ Pimavanserin, a selectiveserotonin 5HT2a inverse agonist (“SSIA”) that is approved for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. InJanuary 2019, Lundbeck indicated they would begin proof of concept studies for Lu AF11167, which has a treatment for persistent negative symptoms inschizophrenia. Other products in clinical development whose targets include negative symptoms (although not necessarily defined as a primary outcome oftheir clinical trials) are Roche’s RO6889450, Takeda’s TAK-831, SyneuRx’s NaBen, and Avanir Pharmaceuticals’ AVP-786. MIN-117: Competition in the Pharmaceutical Market for the Treatment of MDDThe pharmaceutical market for the treatment of MDD is largely comprised of SSRIs, SNRIs and atypical antipsychotics. By the time of MIN-117’s estimatedlaunch, if approved by the FDA, a number of these marketed antidepressants will be generic, and would be key competitors to MIN-117. These productsinclude Forest’s Lexapro/Cipralex (escitalopram), Pfizer’s Zoloft (sertraline), GlaxoSmithKline’s Paxil/Seroxat (paroxetine), Eli Lilly’s Prozac (fluoxetine),Forest’s Viibryd (vilazodone), Pfizer’s Effexor (venlafaxine), Pfizer’s Pristiq (desvenlafaxine), Eli Lilly’s Cymbalta (duloxetine), AstraZeneca’s Seroquel(quetiapine) and Bristol-Myers Squibb’s Abilify (aripiprazole).Both SSRIs and SNRIs have significant limitations. SSRIs may lead to varying levels of weight gain and the impairment in cognitive and sexual functions. Insome cases, SNRIs have a worse safety and tolerability profile compared to SSRIs, in particular with respect to cardiovascular side effects. In addition, SSRIsand SNRIs are effective in only a part of the MDD patient population. Over one-third of patients fail to respond to two or more successive lines ofantidepressant therapy.Patients with treatment-resistant depression (TRD) often require treatment with several antidepressants, such as an SSRI or SNRI, combined with an “adjunct”therapy such as an antipsychotic or mood stabilizer. These antipsychotic compounds, such as AstraZeneca’s Seroquel (quetiapine) and Bristol-MyersSquibb’s Abilify (aripiprazole), and mood stabilizers, such as Janssen Pharmaceuticals’ Topamax (topiramate), cause some slight improvements in efficacybut often have unacceptable side effects, including motor symptoms, sedation, lack of concentration, and weight gain.MIN-117 may have a faster onset of action, fewer side effects than existing treatments, and could benefit non- or partial-responders, but a number of productsin development could also compete with MIN-117. Lundbeck’s Vortioxetine (Brintellix), an SSRI with additional 5-HT receptor modulation activity, hasbeen developed as a monotherapy and was recently approved by the FDA for use as a second-line therapy. Brintellix has been shown to have fewer sideeffects, in particular less impact on cognition, than existing therapies, though it does not show improved efficacy on depressive symptoms In addition,Janssen’s esketamine and Allergan’s rapastinel (formerly Naurex GLYX-13) both target the NMDA receptor and are expected to have a faster onset oftherapeutic effect as compared to currently available therapies.Seltorexant: Competition in the Pharmaceutical Market for the Treatment of InsomniaMost of the pharmaceuticals on the market for insomnia target neurotransmitter pathways involved in depressing the brain activity, such as the histamine andGABA pathways, to induce a decrease in vigilance and attention, leading to sedation and sleep induction. The leading molecule among the current thirdgeneration of GABAergic drugs is Sanofi’s zolpidem, often marketed under the name Ambien, and is available in generic form. However, zolpidem requirescareful utilization to avoid tolerance and drug abuse and extensive sleep studies have demonstrated that zolpidem does not restore physiological sleep anddoes not allow restorative sleep, which prevents good daytime performance.Unlike existing therapies, seltorexant, if approved, is expected to inhibit wakefulness-promoting neurotransmitters, rather than activating sleep-promotingneurotransmitters. In August 2014, Merck & Co.’s dual orexin receptor antagonist, suvorexant, was approved by the FDA and is currently marketed under thename Belsomra®. We believe that Belsomra may be the only new insomnia13 pharmaceutical product to launch significantly in advance of seltorexant’s launch. If approved, we believe seltorexant, which is a single orexin receptorantagonist that targets orexin 2 pathways only and has a different pharmacokinetic profile from Belsomra, may have equal or superior efficacy, less residualsedation and impaired daytime functioning, and superior preservation of appropriate levels of rapid eye movement sleep as compared to Belsomra.MIN-301: Competition in the Pharmaceutical Market for the Treatment of Parkinson’s DiseaseCurrent treatments for Parkinson’s disease are intended to improve the symptoms of patients. The cornerstone of Parkinson’s therapy is levodopa, as it is themost effective therapy for reducing symptoms of Parkinson’s disease. However, levodopa may cause unpleasant systemic side effects, such as dyskinesias,and is often used with dopaminergics to manage these side effects. While initially effective, symptoms become increasingly difficult to control over time, andpatients experience a pattern of motor complications that include motor fluctuations, dyskinesias, off-period dystonia, freezing and falls. Accordingly, thereare advantages to deferring their use to later stages of the disease, or using them with other therapies to reduce the side effects of motor fluctuations anddyskinesia that 50% of levodopa patients experience.Unlike currently available therapies, MIN-301, if approved, is intended to delay the onset of the disease, slow or prevent the progression of the disease orreverse its effects. Since MIN-301 is expected to target Parkinson’s disease, rather than merely its symptoms, and current therapies are not fully effective atimproving the symptoms of Parkinson’s disease without side effects, we believe that levodopa and other currently available generic products may not bedirectly competitive with MIN-301. While there are other drug therapies in development that will target the disease, such as gene and stem cell therapy andA2A receptor agonists, the majority of products in development for Parkinson’s disease are still in the pre-clinical stage.Intellectual PropertyWe strive to protect the proprietary products and technologies that we believe are important to our business, including seeking and maintaining patentprotection intended to cover the composition of our product candidates, their methods of use, related technology and other inventions that are important toour business. We also rely on trade secrets and careful monitoring of our proprietary information to protect aspects of our business that are not amenable to, orthat we do not consider appropriate for, patent protection.The patent portfolios for our product candidates, which we own or are exclusively licensed to us, are summarized below.RoluperidoneCompoundUnder our agreement with MTPC, we have an exclusive license to U.S. Patent No. 7,166,617, which claims the roluperidone compound, as well as tocorresponding patents in the following countries: Australia, Canada, Europe (Albania, Austria, Belgium, Republic of Cyprus, Denmark, Finland, France,Germany, Greece, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Monaco, Netherlands, Portugal, Romania, Slovenia, Spain,Sweden, Switzerland, Turkey, and United Kingdom), Israel, New Zealand, and Russia. The U.S. patent is scheduled to expire no earlier than May 17, 2021,and a patent term extension of up to 5 years may be available. The foreign patents are scheduled to expire no earlier than February 26, 2021.Pharmaceutical CompositionsWe own two granted U.S. patents and pending applications in the U.S., Australia, Brazil, Canada, Chile, Colombia, Eurasia, Europe, Israel, Mexico, NewZealand, Peru, Ukraine, and South Africa, which claim modified-release formulations of roluperidone. The granted U.S. patents, as well as any other U.S. orforeign patents that may grant from these applications, will expire no earlier than November 30, 2035.In 2018, we filed a U.S. and PCT applications which claim gastro-resistant, controlled release dosage formulations of roluperidone. The terms of any futuregranted patents in this patent family would expire no earlier than June 21, 2038.Methods of UseWe own two granted patents in Russia, single patents in the U.S. and Europe (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, and United Kingdom), and several pending applications in twopatent families that are directed to methods of use of roluperidone to treat negative and other symptoms of schizophrenia, sleep disorders, depression, andother sigma-2 disorders or conditions. Applications from these14 families are also currently pending in the United States, Brazil, Canada, Europe, and Russia. The term of the granted U.S. patent is scheduled to expire onJanuary 17, 2033. The foreign patents, as well as any future patents granting in these families, are scheduled to expire no earlier than July 20, 2031.We also own U.S. and EP patent applications directed to the use of roluperidone to treat negative symptoms in non-schizophrenic patients. Any patentsgranting from these applications would expire no earlier than May 23, 2037.MIN-117CompoundUnder our agreement with MTPC, we have an exclusive license to U.S. Patent No. 6,720,320, which claims the MIN-117 compound, as well as tocorresponding patents in Canada and Europe (Germany, France, Italy, Netherlands, Spain and United Kingdom). The U.S. patent expires no earlier thanAugust 13, 2020, and a patent term extension of up to 5 years may be available. The foreign patents are scheduled to expire no earlier than May 22, 2020.Pharmaceutical Compositions and Methods of UseWe own a granted patent in Australia and several pending applications directed to compositions comprising a low dose of MIN-117 and their use for treatingdepression, sleep disorders, and improving cognitive impairment in patients with depression. Applications in this family are also pending in the UnitedStates, Europe, Australia, Brazil, Canada, Chile, Colombia, Israel, Mexico, New Zealand, Peru, Russia, and South Africa. Patents that grant from theseapplications will expire no earlier than January 24, 2034. A patent term extension of up to five years may be available in the United States.We also own U.S. and EP patent applications directed to the use of MIN-117 to treat anxiety disorders. Any patents granting from these applications wouldexpire no earlier than May 23, 2037.In 2018, we filed a provisional application in the U.S. directed to methods of treating pain comprising the administration of MIN-117.SeltorexantCompoundUnder our agreement with Janssen, we are an exclusive licensee of European Patent EP2491038, which claims the seltorexant compound and was validated in39 European countries. The terms of these patents will expire no earlier than October 21, 2030.Methods of UseWe also have rights to a PCT application filed in 2017, which is directed to the use of seltorexant to treat depression. National phase applications basedupon this PCT application were filed in 2018, and the terms of any patents issuing from these applications will expire no earlier than March 9, 2037.MIN-301We own a patent family that is directed to the use of MIN-301 for treating neurologic and psychiatric diseases, including Parkinson’s disease. This patentfamily includes patents granted in Australia, Canada, Europe (Austria, Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Netherlands, Norway,Portugal, Spain, Sweden, Switzerland, Turkey and United Kingdom), Japan, Mexico and Russia. Applications are pending in the United States, China, andHong Kong. The terms of any existing and future granted patents in this family will expire no earlier than November 17, 2028. A patent term extension of upto five years may be available in the United States.Data and Marketing ExclusivityIn addition to patent protection, our product candidates may also be eligible for data and marketing exclusivity protection in the U.S., EU and certain othercountries. If this protection is available, no competitor may use the data in our marketing application to obtain marketing approval of a generic productduring the exclusivity period.15 For small molecules, such as roluperidone, seltorexant and MIN-117, the data and marketing exclusivity period is generally five years in the U.S. and tenyears in the EU, measured from the FDA and EU approval dates, respectively. If MIN-301 is approved as a biologic product, it may be eligible for a data andmarketing exclusivity period of twelve years in the U.S. and ten years in the EU. The data and marketing exclusivity periods in the U.S. and EU may beextended by 6 months of pediatric exclusivity if a qualifying pediatric study is performed.ManufacturingWe do not have any manufacturing facilities or personnel. We currently rely, and expect to continue to rely, on third parties for the manufacturing of ourproduct candidates for pre-clinical and clinical testing, as well as for commercial manufacturing if our product candidates receive marketing approval. Ourproduct candidates are manufactured in reliable and reproducible synthetic processes from readily available starting materials. The chemistry does not requireunusual equipment in the manufacturing process. We expect to continue to develop product candidates that can be produced cost-effectively at contractmanufacturing facilities.CommercializationWe began to expand our internal capabilities related to commercial planning, strategic product development and product marketing in late 2017. Except formost of Asia, we have global commercialization rights for two of our product candidates, roluperidone and MIN-117, and European Union commercializationrights for seltorexant. We have worldwide rights for MIN-301. We believe that it will be possible for us to access European and, in the case of roluperidone,MIN-117 and MIN-301, other priority markets including the United States, Asia, and Latin America, through a focused, specialized sales force where thepopulation dynamics would prove efficient. We may enter into sales, distribution or other marketing arrangements with third parties for priority markets orlimited to certain territories for any of our drug candidates that obtain marketing approval.Subject to receiving marketing approvals, we expect to commence commercialization activities by building a focused sales and marketing organization,either alone or through collaborations with third parties, in the United States, EU and Latin America to sell our product candidates. We believe that such anorganization will be able to target the community of physicians who are the key specialists in treating the patient populations for which our productcandidates are being developed. Additionally, we plan to engage fully with all key constituencies involved in treatment decisions, including payors, patientsand others.Government Regulation and Product ApprovalClinical Trials and Marketing Authorization in the European UnionIn Europe, a clinical trial application, or CTA, must currently be submitted to the competent national regulatory authority and to independent ethicscommittees in each country in which we intend to conduct clinical trials. Once the CTA is approved in accordance with that country’s requirements, clinicaltrial development may proceed in that country. Under the new Regulation on Clinical Trials, which is expected to take effect in 2019, there will be acentralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities have only alimited involvement. Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be notified to orapproved by the relevant competent authorities and ethics committees. In all cases, the clinical trials must be conducted in accordance with good clinicalpractices and other applicable regulatory requirements and medicines used in clinical trials must be manufactured in accordance with good manufacturingpractices. A clinical trial may only be undertaken subject to certain conditions. The relevant ethics committee must give its opinion, before a clinical trialcommences, on any issue requested. Clinical trials information must be entered into a European database. There are strict requirements in relation to thelabeling and packaging of our product candidates, the verification of compliance with the provisions on good clinical and manufacturing practice and thenotification of adverse events and serious adverse reactions.Under European Union regulatory systems, a company may not market a medicinal product without marketing authorization.There are four procedures for submitting a Marketing Authorization Application, or MAA, in the EU: (i) the national procedure, (ii) the mutual recognitionprocedure, or MRP; (iii) the decentralized, or DCP and (iv) the centralized procedure, or CP. The submission strategy for a given product will depend on thenature of the product, the target indication(s), the history of the product, and the marketing plan. The centralized procedure is compulsory for certainmedicinal products which are produced by biotechnology processes, advanced therapy medicinal products and orphans. Besides the products falling underthe mandatory scope, the centralized procedure is also open for medicinal products that constitute a significant therapeutic, scientific or technical innovationi.e. new active substances or other medicinal products that constitute a significant therapeutic, scientific or technical innovation.16 The centralized procedure leads to approval of the product in all 28 EU member states and in Norway, Iceland and Liechtenstein, collectively referred toherein as the EEA. Submission of one MAA thus leads to one assessment process and one authorization that allows access to the market of the entire EEA.The process of the centralized procedure is triggered when the applicant submits an MAA to the EMA. The letter of intent also initiates the assignment of theRapporteur and Co-Rapporteur, who are the two appointed members of the Committee for Human Medicinal Products, or CHMP, representing two EUmember states. Under the centralized procedure, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days. This excludes so-calledclock stops, during which additional written or oral information is to be provided by the applicant in response to questions asked by the Committee forHuman Medicinal Products, or CHMP. At the end of the review period, the CHMP provides an opinion to the European Commission. If this is opinionfavorable, the Commission may then adopt a decision to grant a marketing authorization. In exceptional cases, the CHMP might perform an acceleratedreview of an MAA in no more than 150 days. This is usually when the product is of major interest from the point of view of public health and, in particular,from the viewpoint of therapeutic innovation.When using the MRP or DCP, the applicant must select which and how many EU member states in which to seek approval. In the case of an MRP, theapplicant must initially receive national approval in one EU member state. This will be the so-called reference member state, or RMS, for the MRP. Then, theapplicant seeks approval for the product in other EU member states, the so-called concerned member states, or CMS, in a second step: the mutual recognitionprocess. For the DCP, the applicant will approach all chosen member states at the same time. To do so, the applicant will identify the RMS that will assess thesubmitted MAA and provide the other selected member states with the conclusions und results of the assessment.The European Union medicines rules expressly permit the EU Member States to adopt national legislation prohibiting or restricting the sale, supply or use ofany medicinal product containing, consisting of or derived from a specific type of human or animal cell, such as embryonic stem cells. While the products wehave in development do not make use of embryonic stem cells, it is possible that the national laws in certain EU Member States may prohibit or restrict usfrom commercializing our products, even if they have been granted an EU marketing authorization.An innovator company enjoys a period of “data exclusivity” during which their pre-clinical and clinical trials data may not be referenced in the regulatoryfilings of another company (typically a generic company) for the same drug substance.Data exclusivity in Europe is 8 years from the date of first authorization in Europe with an additional period of 2 years of “market exclusivity.” This is theperiod of time during which a generic company may not market an equivalent generic version of the originator’s pharmaceutical product. An additional 1year may be obtained where the innovator company is granted a marketing authorization within the above 8-year period for a significant new indication forthe relevant medicinal product.The Pediatric Regulation provides that an application for a new marketing authorization must include the results of all trials performed and details of allinformation collected in compliance with an agreed pediatric investigation plan, or PIP, unless a deferral or waiver applies on the basis that pediatric use isnot relevant - also the requirement can be deferred by agreement.When the application for marketing authorization is made, the competent authority responsible for granting a marketing authorization must verify whetherthe application complies with the relevant requirements, including compliance with the agreed PIP. Assuming it does, the marketing authorization may begranted and the relevant results are included in the summary of product characteristics, or SmPC, for the product, along with a statement indicatingcompliance with the agreed PIP. The applicant then receives the six month extension to the SPC. It is not necessary for the product actually to be indicatedfor use in the pediatric population (for example, if the results show that that would not be appropriate).U.S. FDA Approval ProcessIn the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, or the FDCA, andother federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, packaging, storage,recordkeeping, approval, labeling, advertising, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import andexport of pharmaceutical products. MIN-301, a peptide, may be regulated as a biologic and additionally subject to the Public Health Service Act. Failure tocomply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to allow pendingInvestigational New Drug Applications, or INDs, and approve NDAs, withdrawal of a marketing approval, imposition of clinical holds or termination ofclinical trials, or issuance of Warning or Untitled Letters, product recalls, product seizures, refusal to allow imports or exports total or partial suspension ofproduction or distribution, debarment, injunctions, fines, refusal of government contracts, exclusion from participation in federal and state healthcareprograms, restitution, disgorgement, civil penalties and criminal prosecution, including criminal fines and imprisonment.17 FDA approval is required before any new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the UnitedStates. Pharmaceutical product development in the United States typically involves, among other things, pre-clinical laboratory and animal tests, thesubmission to the FDA of an IND, which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials toestablish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirementstypically takes many years and significant financial investment, and the actual time and cost required may vary substantially based upon the type,complexity and novelty of the product or disease indicated for treatment.Pre-clinical tests include laboratory evaluation of product chemistry, pharmacology, stability, formulation and toxicity, as well as animal trials to assess thecharacteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations and requirementsincluding good laboratory practices. The results of pre-clinical testing are submitted to the FDA as part of an IND along with other information includinginformation about product chemistry, manufacturing and controls, any available clinical data or literature, and a proposed clinical trial protocol, among otheritems. Certain pre-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may be conducted after the IND is submitted. A 30-daywaiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has not placed a clinical holdon the IND within this 30-day period, the clinical trial proposed in the IND may begin. Should FDA place a clinical hold on the IND, the IND sponsor and theFDA must resolve any outstanding concerns before the clinical trial may begin.Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of a qualified investigator. Clinical trialsmust be conducted in compliance with federal regulations, good clinical practices, or GCP, which include the ethical principles that all research subjectsprovide their informed consent in writing for their participation in any clinical trial, and that all trials be approved and monitored on an ongoing basis by aninstitutional review board, or IRB. Clinical trials must also be conducted under protocols detailing the objectives of the trial, trial procedures, the parametersto be used in monitoring safety and the effectiveness criteria to be evaluated, and a statistical analysis plan. Each protocol involving testing in U.S. subjectsand subsequent protocol amendments must be submitted to the FDA as part of the IND. The study protocol and informed consent information for subjects inclinical trials, along with all amendments, must also be submitted to an IRB for approval.Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, the initialintroduction of the drug into healthy human subjects or subjects with the target disease or condition, the drug is tested to assess safety, metabolism,pharmacokinetics, pharmacological actions, side effects associated with increasing doses and, if possible, early evidence of effectiveness. Phase 2 usuallyinvolves trials in a limited subject population with the target disease or condition to evaluate the effectiveness of the drug for a particular indication orindications, dosage tolerance and optimum dosage, and identify possible adverse effects and safety risks. If a compound demonstrates evidence ofeffectiveness and an acceptable safety profile in Phase 2 evaluations, generally two adequate and well-controlled Phase 3 trials are undertaken to obtainadditional information about clinical efficacy and safety in a larger number of subjects, typically at geographically dispersed clinical trial sites, to establishthe overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug. In some cases, the FDA may conditionapproval on the sponsor’s agreement to conduct additional clinical trials to further assess the drug’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 trials. Progress reports detailing the results of the clinical trials must be submitted at least annually to theFDA and more frequently if serious adverse events occur. Information about certain clinical trials, including a description of the study and study results mustalso be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their clinicaltrials.gov website.The manufacture of investigational drugs for the conduct of human clinical trials is subject to the Current Good Manufacturing Practices, or cGMPs.Investigational drugs and active pharmaceutical ingredients, imported into the United States are also subject to regulation by FDA relating to their labelingand distribution. Further, the export of investigational drug products outside of the United States is subject to regulatory requirements of the receivingcountry as well as United States export requirements.The FDA may suspend or terminate a clinical trial, or impose other sanctions, at any time on various grounds, including a finding that the research subjectsare being exposed to an unacceptable health risk or if it believes that the clinical trials are not being conducted in accordance with FDA requirements.Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’srequirements or if the drug has been associated with unexpected serious harm to subjects, or may impose other conditions on the conduct of the research.Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safetymonitoring board or committee. This group regularly reviews accumulated data and advises the study sponsor regarding the continuing safety of trialsubjects, potential trial subjects, and the continuing validity and scientific merit of the clinical trial. Sponsors may also suspend or terminate a clinical trialbased on safety concerns, a lack of evidence of drug efficacy, evolving business objectives and/or competitive climate.18 After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before marketing of theproduct may begin in the United States. The NDA must include the results of all pre-clinical, clinical and other testing and a compilation of data relating tothe product’s pharmacology, chemistry, manufacture and controls, and proposed labeling, among other things. Under federal law, the submission of mostmarketing applications is subject to a substantial application user fee, and the sponsor of an approved application is also subject to annual program fees.In addition, under the Pediatric Research Equity Act, or PREA, a marketing application or supplement to a marketing application for a new active ingredient,indication, dosage form, dosage regimen or route of administration must contain data that are adequate to assess the safety and effectiveness of the drug forthe claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which theproduct is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric datauntil after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, either during the application process or after the approval of thedrug to mitigate any identified or suspected serious risks, and to identify any new risks that were not apparent in clinical investigations. The REMS plancould include medication guides, physician communication plans, assessment plans, and elements to assure safe use, such as restricted distribution methods,patient registries or other risk minimization tools.The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s thresholddetermination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. TheFDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed,packaged or held meets standards designed to assure the product’s continued safety, quality and purity.Under the Prescription Drug User Fee Act the FDA has agreed to certain performance goals in the review of NDAs. The FDA has a goal of reviewing ninetypercent of applications for non-priority drug products within 10 months of the FDA’s acceptance of the full application for filing. The review process may beextended by the FDA under certain circumstances.Under the FDCA and FDA guidance, before approving a drug for which no active ingredient (including any ester or salt of the active ingredients) haspreviously been approved by the FDA or a first-of-a-kind, first-in-class biologic, FDA must either refer that drug to an external advisory committee or providein an action letter, a summary of the reasons why FDA did not refer the drug to an advisory committee. The external advisory committee review may also berequired for other drugs because of certain other issues, including clinical trial design, safety and effectiveness, and public health questions. An advisorycommittee is a panel of independent experts, including clinicians and other experts, for review, evaluation and a recommendation as to whether theapplication should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers suchrecommendations carefully when making decisions.Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the product unless the facility,and all of its subcontractors and contract manufacturers, demonstrate compliance with cGMPs, and provide adequate assurance that they can consistentlyproduce the product within required specifications, and the NDA contains data that provides substantial evidence that the drug is safe and effective for theindication sought in the proposed labeling. Additionally, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCPsbefore approving a marketing application. After the FDA evaluates the marketing application and the manufacturing facilities, it may issue an approval letter,or a complete response letter. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testingor information in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide thatthe application does not satisfy the regulatory criteria for approval. If and when those deficiencies have been addressed to the FDA’s satisfaction in aresubmission of the NDA, the FDA may issue an approval letter.An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDAapproval, the FDA may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy and may impose other conditions,including labeling restrictions, limitations on the approved indications, contraindications, warnings or precautions, such as black boxed warnings,distribution restrictions or other risk-management mechanisms under a REMS which can materially affect the potential market and profitability of the drug.The FDA may prevent or limit further marketing of a product based on the results of post-marketing trials or surveillance programs. Further, if there are anymodifications to the drug, including changes in indications, labeling, manufacturing processes or facilities, or new safety issues arise, a new or supplementalNDA or a post-implementation notification or other report may be required or requested depending on the change, which may require additional data oradditional pre-clinical studies and clinical trials. Once granted, product approvals may be withdrawn if compliance with regulatory standards is notmaintained or problems are identified following initial marketing.19 Post-Approval RequirementsDrugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things,requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverseexperiences with the product and drug shortages. After approval, most changes to the approved product, such as adding new indications, manufacturingchanges or other labeling claims, are subject to further testing requirements and prior FDA review and approval.In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are subject to periodic announced andunannounced inspections by the FDA and these state agencies for compliance with cGMP and other regulatory requirements. Changes to the manufacturingprocess are strictly regulated and may require prior FDA approval or notification before being implemented. FDA regulations also require investigation andcorrection of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that thesponsor may decide to use.Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problemsoccur after the product reaches the market.Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturingprocesses, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information;imposition of post-market trials or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Otherpotential consequences include, among other things: •restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; •fines, Untitled Letters, Warning Letters or holds on post-approval clinical trials; •refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; •product seizure or detention, or refusal to permit the import or export of products; or •injunctions or the imposition of administrative civil or criminal penalties, including fines and imprisonment.The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Although physicians, in the practice ofmedicine, may prescribe approved drugs for unapproved indications if in their professional medical judgment they believe it to be appropriate,pharmaceutical companies may only market and promote their drug products for the FDA approved indications and in accordance with the provisions of theapproved label. The FDA and other agencies actively enforce the laws prohibiting the marketing and promotion of off-label uses, and a company that isfound to have improperly marketed or promoted off-label uses may be subject to significant liability, including, among others, criminal and civil penaltiesunder the FDCA and False Claims Act, exclusion from participation in federal healthcare programs, and mandatory compliance programs.In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates thedistribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability indistribution.Moreover, the Drug Quality and Security Act imposes obligations on manufacturers of pharmaceutical products, among others, related to product andtracking and tracing.In the European Union, holders of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualifiedperson for pharmacovigilance, or QPPV, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected seriousadverse reactions and submission of periodic safety update reports, or PSURs.All new European marketing authorization applications must include a risk management plan, or RMP, describing the risk management system that thecompany will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may alsoimpose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may includeadditional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. RMPs andPSURs are routinely available to third parties requesting access, subject to limited redactions. All advertising and promotional activities for the product mustbe consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited. Direct-to-20 consumer advertising of prescription medicines is also prohibited in the European Union. Although general requirements for advertising and promotion ofmedicinal products are established under EU directives, the details are governed by regulations in each EU Member State and can differ from one country toanother.Federal and State Fraud and Abuse, Data Privacy and Security and Transparency LawsIn addition to FDA restrictions on marketing and promotion of pharmaceutical products, other federal and state healthcare laws restrict business practices inthe biopharmaceutical industry. These laws include, without limitation, state and federal anti-kickback and false claims laws, data privacy and security laws,as well as transparency laws regarding payments or other items of value provided to healthcare providers. Applicable state anti-kickback and false claimslaws may be broader in scope than federal law and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other stateprograms.We may also be subject to state laws governing the privacy and security of health information in certain circumstances, many of which differ from each otherin significant ways and often are not preempted by the Health Insurance and Portability and Accountability Act (“HIPAA”), thus complicating complianceefforts. In addition, we may be subject to reporting requirements under state transparency laws, as well as state laws that require pharmaceutical companies tocomply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwiserestricts certain payments that may be made to healthcare providers and entities.If our operations are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject topenalties, including potentially significant criminal and civil and/or administrative penalties, damages, fines, disgorgement, individual imprisonment,exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits andfuture earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolveallegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability tooperate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreignlaws.Coverage and ReimbursementThe commercial success of our product candidates and our ability to commercialize any approved product candidates successfully will depend in part on theextent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursementlevels for our product candidates, once approved.Government health administration authorities, private health insurers and other third-party payors generally decide which drugs they will pay for andestablish reimbursement levels for healthcare. In particular, in the United States, private health insurers and other third-party payors often providereimbursement for products and services based on the level at which the government (through the Medicare or Medicaid programs) provides reimbursementfor such treatments. Sales of our product candidates will therefore depend substantially, both domestically and abroad, on the extent to which the costs of ourproduct candidates will be covered by third-party payors. The market for our product candidates will depend significantly on access to third-party payors’formularies without prior authorization, step therapy, or other limitations such as approved lists of treatments for which third-party payors provide coverageand reimbursement. Also, third-party payors are developing increasingly sophisticated methods of controlling healthcare costs. Coverage and reimbursementfor therapeutic products can differ significantly from payor to payor. A third-party payors’ decision to provide coverage for a medical product or service doesnot imply that an adequate reimbursement rate will be approved. One third-party payor’s decision to cover a particular medical product or service does notensure that other payors will also provide coverage for the medical product or service, or will provide coverage at an adequate reimbursement rate. As a result,the coverage determination process will require us to provide scientific and clinical support for the use of our products to each payor separately, with noassurance that adequate coverage and reimbursement will be obtained.In the United States, the European Union and other potentially significant markets for our product candidates, government authorities and other third-partypayors are developing increasingly sophisticated methods of controlling healthcare costs and are increasingly imposing additional requirements andrestrictions on coverage.Further, the increased emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in the EuropeanUnion will put additional pressure on product pricing, reimbursement and utilization, which may adversely affect our future product sales and results ofoperations. These pressures can arise from rules and practices of managed care organizations, competition within therapeutic classes, availability of genericequivalents or biosimilars, judicial decisions and governmental laws related to Medicare, Medicaid and healthcare reform, pharmaceutical coverage andreimbursement policies and pricing in general. The cost containment measures that healthcare payors and providers are instituting and the effect of anyhealthcare reform implemented in the future could significantly reduce our revenues from the sale of any approved product candidates. We21 cannot provide any assurances that we will be able to obtain and maintain governmental or private third-party coverage or adequate reimbursement for ourproduct candidates in whole or in part.Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically,there have been several recent U.S. congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things,bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government programreimbursement methodologies for drugs. At the federal level, Congress and the Trump administration have each indicated that it will continue to seek newlegislative and/or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementingregulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictionson certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from othercountries and bulk purchasing.Healthcare ReformThe United States and some foreign jurisdictions are considering enacting or have enacted a number of additional legislative and regulatory proposalsdesigned to change the healthcare system in ways that could affect our ability to sell our products profitably.In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislativeinitiatives, including the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, orcollectively, the ACA, which substantially changed healthcare financing and delivery by both governmental and private insurers, and significantly impactedthe pharmaceutical industry. The ACA contains provisions that may potentially reduce the profitability of products, including, for example, increased rebatesfor products sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part Dbeneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. There have been judicial and congressionalchallenges to the ACA, as well as efforts by the Trump administration to repeal or replace certain aspects of the ACA. Since January 2017, President Trumphas signed two Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirementsfor health insurance mandated by the ACA. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation ofcertain taxes under the ACA have been signed into law, including the repeal, effective January 1, 2019, of the tax-based shared responsibility paymentimposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the“individual mandate” and delays in the implementation of the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annualfee imposed on certain health insurance providers based on market share, and the medical device excise tax on imposed on certain non-exempt medicaldevices. Further, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to increase from 50% to70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in mostMedicare drug plans, commonly referred to as the ‘‘donut hole.’’ More recently, in July 2018, CMS published a final rule permitting further collections andpayments to and from certain ACA qualified health plans and health insurance issuers under the ACA adjustment program in response to the outcome offederal district court litigation regarding the method CMS uses to determine this risk adjustment. Congress could still consider other legislation to repeal orrepeal and replace all or portions of the ACA. Additionally, on December 14, 2018, a Texas U.S. District Court Judge ruled that the ACA is unconstitutionalin its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. While the Texas U.S. District Court Judge, as well as theTrump administration and CMS, have stated that the ruling will have no immediate effect pending appeal of the decision, it is unclear how this decision,subsequent appeals, and other efforts to repeal and replace the ACA will impact the ACA. We expect that healthcare reform measures that may be adopted inthe future may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that may be charged forany of our product candidates, if approved.The Foreign Corrupt Practices ActThe Foreign Corrupt Practices Act, or the FCPA, prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering ofanything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreignentity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in theUnited States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions ofthe corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for internationaloperations. Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment,disgorgement, oversight, and debarment from government contracts.22 Brexit and the Regulatory Framework in the United KingdomOn June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union, commonly referred to as “Brexit”. Thereafter, onMarch 29, 2017, the country formally notified the European Union of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty. The withdrawal ofthe United Kingdom from the European Union is expected to take effect either on the effective date of the withdrawal agreement to be negotiated by theparties or, in the absence of agreement, two years after the United Kingdom provided the notice of withdrawal pursuant to the Treaty on European Union, oron March 29, 2019. Since the regulatory framework for pharmaceutical products in the United Kingdom covering quality, safety and efficacy ofpharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EuropeanUnion directives and regulations, immediately following Brexit, it is expected that the United Kingdom’s regulatory regime will remain aligned to Europeanregulations. It remains to be seen how, if at all, Brexit will impact regulatory requirements for product candidates and products in the United Kingdom. In thelonger term, Brexit could materially impact the future regulatory regime which applies to products and the approval of product candidates in the UnitedKingdom.EmployeesAs of December 31, 2018, we had 13 full-time employees. In addition, we are or have engaged with a number of consultants and companies, includingPharma Partnering in Research & Strategy SAS, or PPRS, that provide expertise in the key functions involved with the development of our products. None ofour employees is subject to a collective bargaining agreement and we consider our relationship with our employees to be good.Available InformationWe file reports with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, currentreports on Form 8-K any other filings required by the SEC. We make available on our website (www.minervaneurosciences.com) our annual report on Form10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such materialis electronically filed with or furnished to the SEC. These materials are available free of charge on or through our website via the Investor Relations page atwww.minervaneurosciences.com. References to our website address in this report are intended to be inactive textual references only, and none of theinformation contained on our website is part of this report or incorporated in this report by reference.The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers thatfile electronically with the SEC. ITEM 1A.Risk Factors This Annual Report on Form 10-K contains forward-looking information based on our current expectations. Because our actual results may differmaterially from any forward-looking statements that we make or that are made on our behalf, this section includes a discussion of important factors thatcould affect our actual future results, including, but not limited to, our capital resources, the progress and timing of our clinical programs, the safety andefficacy of our product candidates, risks associated with regulatory filings, risks associated with determinations made by regulatory agencies, the potentialclinical benefits and market potential of our product candidates, commercial market estimates, future development efforts, patent protection, effects ofhealthcare reform, reliance on third parties, and other risks set forth below.Risks Related to Our Financial Position and Capital RequirementsWe have incurred significant losses since our inception. We expect to continue to incur losses over the next several years and may never achieve ormaintain profitability.We are a clinical development-stage biopharmaceutical company. In November 2013, we merged with Sonkei Pharmaceuticals, Inc., or Sonkei, and, inFebruary 2014, we acquired Mind-NRG, which were also clinical development-stage biopharmaceutical companies. Investment in biopharmaceutical productdevelopment is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate willfail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval or become commercially viable. As an early stage company, wehave limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered bycompanies in new and rapidly evolving fields, particularly the biopharmaceutical area. We have no products approved for commercial sale and have notgenerated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoingoperations.23 We are not profitable and have incurred losses in each period since our inception in 2007. For the year ended December 31, 2018, and 2017, we reported netlosses of $50.2 million and $31.5 million, respectively. As of December 31, 2018, we had an accumulated deficit of $214.6 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research anddevelopment of, and seek regulatory approvals for, our product candidates. If any of our product candidates fail in clinical trials or do not gain regulatoryapproval, or if any of our product candidates, if approved, fail to achieve market acceptance, we may never generate revenue or become profitable. Even if weachieve profitability in the future, we may not be able to sustain profitability in subsequent periods. We may encounter unforeseen expenses, difficulties,complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate offuture growth of our expenses and our ability to generate revenues. Our prior losses and expected future losses have had and will continue to have an adverseeffect on our stockholders’ equity and working capital.We will require additional capital to finance our operations, which may not be available to us on acceptable terms, or at all. As a result, we may notcomplete the development and commercialization of our product candidates or develop new product candidates.Our operations and the historic operations of Sonkei and Mind-NRG have consumed substantial amounts of cash since inception. We expect our research anddevelopment expenses to increase substantially in connection with our ongoing activities to develop and commercialize products.As of December 31, 2018, we had cash, cash equivalents, restricted cash, and marketable securities of $88.1 million. We believe that our existing cash, cashequivalents, restricted cash, and marketable securities will be sufficient to meet our cash commitments for at least the next 12 months after the date that theyear-end condensed financial statements are issued. The process of drug development can be costly and the timing and outcomes of clinical trials isuncertain. The assumptions upon which we have based our estimates are routinely evaluated and may be subject to change. The actual amount of ourexpenditures will vary depending upon a number of factors including but not limited to the design, timing and duration of future clinical trials, the progressof our research and development programs, the infrastructure to support a commercial enterprise, the cost of a commercial product launch, and the level offinancial resources available.Our future funding requirements, both short and long-term, will depend on many factors, including: •the initiation, progress, timing, costs and results of pre-clinical studies and clinical trials for our product candidates and future productcandidates we may develop; •the outcome, timing and cost of seeking and obtaining regulatory approvals from the EMA, FDA, and comparable foreign regulatoryauthorities, including the potential for such authorities to require that we perform more studies than those that we currently expect; •the cost to establish, maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of anypayments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecution, defense andenforcement of any patents or other intellectual property rights; •the effect of competing technological and market developments; •market acceptance of any approved product candidates; •the costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; and •the cost of establishing sales, marketing and distribution capabilities for our product candidates for which we may receive regulatory approvaland that we determine to commercialize ourselves or in collaboration with our partners.When we need to secure additional financing, such additional fundraising efforts may divert our management from our day-to-day activities, which mayadversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available insufficient amounts or on terms acceptable to us, if at all. If we raise additional equity financing, our stockholders may experience significant dilution of theirownership interests, and the per-share value of our common stock could decline. If we engage in debt financing, we may be required to accept terms thatrestrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. Further, the evolving and volatile globaleconomic climate and global financial market conditions could limit our ability to raise funding and otherwise adversely impact our business or those of ourcollaborators and providers. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us we may have to significantly delay,scale back or discontinue the development or commercialization of one or more of our product candidates. Any of these events could significantly harm ourbusiness, financial condition and prospects.24 Changes in estimates regarding fair value of intangible assets may result in an adverse impact on our results of operations.We test goodwill and in-process research and development for impairment annually or more frequently if changes in circumstances or the occurrence ofevents suggest impairment exists. The test for impairment of in-process research and development requires us to make several estimates about fair value, mostof which are based on projected future cash flows. Changes in these estimates may result in the recognition of an impairment loss in our results of operations.An impairment analysis is performed whenever events or changes in circumstances indicate that the carrying amount of any individual asset may not berecoverable. For example, if we or our counterparties fail to perform our respective obligations under an agreement, or if we lack sufficient funding to developour product candidates, an impairment may result. In addition, any significant change in market conditions, estimates or judgments used to determineexpected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known.The recently passed comprehensive tax reform bill could adversely affect our business and financial condition.On December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986, as amended (the“Code”). The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of thecorporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings(except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of netoperating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreignearnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense overtime, and modifying or repealing many business deductions and credits. Notwithstanding the reduction in the corporate income tax rate, the overall impact ofthe new federal tax law is uncertain and our business and financial condition could be adversely affected. In addition, it is uncertain if and to what extentvarious states will conform to the newly enacted federal tax law. We plan to use potential future operating losses and our federal and state net operating loss, or NOL, carryforwards to offset taxable income from revenuegenerated from operations or corporate collaborations. However, our ability to use existing NOL carryforwards may be limited as a result of issuance ofequity securities.As of December 31, 2018, we had approximately $53.9 million of Federal NOL carryforwards. These Federal NOL carryforwards will begin to expire atvarious dates beginning in 2027, if not utilized. Under the newly enacted Federal income tax law, Federal NOLs incurred in 2018 and in future years may becarried forward indefinitely, but the deductibility of such Federal NOLs is limited. We plan to use our operating losses to offset any potential future taxableincome generated from operations or collaborations. To the extent we generate taxable income, we plan to use our existing NOL carryforwards and futurelosses to offset income that would otherwise be taxable. If substantial changes in ownership have occurred, there could be annual limitations on the amountof carryforwards that can be realized in future periods. We have not performed a detailed analysis to determine whether an ownership change occurred uponconsummation of the merger between us and Sonkei, upon the acquisition of Mind-NRG or our initial public offering, the concurrent private placements orour subsequent public offerings. However, as a result of these transactions, it is likely that an ownership change has occurred. Therefore, it is likely that someor all of our existing NOL carryforwards would be limited by the provisions of Section 382 of the Code. Further, state NOL carryforwards may be similarlylimited. We had approximately $48.3 million of state net operating carryforwards at December 31, 2018. It is also possible that future changes in ownership,including as a result of subsequent sales of securities by us or our stockholders, could similarly limit our ability to utilize NOL carryforwards. It is possiblethat all of our existing NOL carryforwards have been or will be disallowed. Any such disallowances may result in greater tax liabilities than we would incur inthe absence of such a limitation and any increased liabilities could adversely affect our business, results of operations, financial condition and cash flow.Risks Related to Our Business and IndustryWe cannot give any assurance that any of our product candidates will receive regulatory approval in a timely manner or at all, which is necessary beforethey can be commercialized.The regulatory approval process is expensive and the time required to obtain approval from the EMA, FDA or other regulatory authorities in otherjurisdictions to sell any product is uncertain and may take years.Whether regulatory approval will be granted is unpredictable and depends upon numerous factors, including the substantial discretion of the regulatoryauthorities. Moreover, the filing of a marketing application, including a New Drug Application, or NDA, or Biologics License Application, or BLA, requires apayment of a significant user fee upon submission. The filing of marketing applications for our product candidates may be delayed due to our lack offinancial resources to pay such user fee.25 If, following submission, our application is not accepted for substantive review or approval, the EMA, FDA or other comparable foreign regulatory authoritiesmay require that we conduct additional clinical or pre-clinical trials, provide additional data, manufacture additional validation batches or developadditional analytical tests methods before they will reconsider our application. If the EMA, FDA or other comparable foreign regulatory authorities requiresadditional studies or data, we would incur increased costs and delays in the marketing approval process, which may require us to expend more resources thanwe have available. In addition, the EMA, FDA or other comparable foreign regulatory authorities may not consider any additional required trials, data orinformation that we perform or provide to be sufficient, or we may decide, or be required, to abandon the program.Moreover, policies, regulations, or the type and amount of pre-clinical and clinical data necessary to gain approval may change during the course of aproduct candidate’s clinical development and may vary among jurisdictions. It is possible that none of our existing product candidates or any of our futureproduct candidates will ever obtain regulatory approval, even if we expend substantial time and resources seeking such approval.Our product candidates could fail to receive regulatory approval for many reasons, including the following: •The EMA, FDA or other regulatory authorities may disagree with the design or implementation of our clinical trials. We have not yet consultedwith the EMA or the FDA on the design and conduct of the clinical trials that have already been conducted or that we intend to conduct. Thus,the EMA, FDA and other comparable foreign authorities may not agree with the design or implementation of these trials. We intend to seekguidance from the EMA in relation to the European Union clinical trial program and the FDA on the design and conduct of clinical trials of ourcompounds when we initiate a clinical program in the United States in the future. •We may be unable to demonstrate to the satisfaction of the EMA, FDA or other regulatory authorities that a product candidate is safe andeffective for its proposed indication. •The results of clinical trials may not meet the level of statistical significance required by the EMA, FDA or other regulatory authorities forapproval. •We may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh any safety risks. •The EMA, FDA or other regulatory authorities may disagree with our interpretation of data from pre-clinical studies or clinical trials. •The data collected from clinical trials of our product candidates may not be sufficient to support an NDA or other submission or to obtainregulatory approval in the United States or elsewhere. •The EMA, FDA or other regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers withwhich we contract for clinical and commercial supplies. •The approval policies or regulations of the EMA, FDA or other regulatory authorities may significantly change in a manner rendering ourclinical data insufficient for approval.Even if we obtain approval for a particular product, regulatory authorities may approve that product for fewer or more limited indications, including morelimited patient populations, than we request, may require that contraindications, warnings, or precautions be included in the product labeling, including ablack box warning, may grant approval contingent on the performance of costly post-marketing clinical trials or other post-market requirements, includingrisk evaluation and mitigation strategies, or REMS, or may approve a product candidate with a label that does not include the labeling claims necessary ordesirable for the successful commercialization of that product. Any of the foregoing could materially harm the commercial prospects for our productcandidates.Results of earlier clinical trials may not be predictive of the results of later-stage clinical trials.The results of pre-clinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.Interpretation of results from early, usually smaller, trials that suggest positive trends in some subjects, require caution. Results from later stages of clinicaltrials enrolling more subjects may fail to show the desired safety and efficacy results or otherwise fail to be consistent with the results of earlier trials of thesame product candidate. This may occur for a variety of reasons, including differences in trial design, trial endpoints (or lack of trial endpoints in exploratorystudies), subject population, number of subjects, subject selection criteria, trial duration, drug dosage and formulation or due to the lack of statistical powerin the earlier trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trialsdue to lack of efficacy or unacceptable safety profiles, notwithstanding promising results in earlier trials.The results of clinical trials conducted at sites outside the United States may not be accepted by the FDA and the results of clinical trials conducted at sitesin the United States may not be accepted by international regulatory authorities.We plan to conduct our clinical trials outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States,acceptance of this data would be subject to certain conditions imposed by the FDA. For example, the26 clinical trial must be well-designed and conducted and performed by qualified investigators in accordance with ethical safeguards such as institutionalreview board, or IRB, or ethics committee approval and informed consent. The study population must also adequately represent the applicable United Statespopulation, and the data must be applicable to the American population and medical practice in ways that the FDA deems clinically meaningful. In addition,while clinical trials conducted outside of the United States are subject to the applicable local laws, FDA acceptance of the data from such trials will bedependent upon its determination that the trials were conducted consistent with all applicable United States laws and regulations. There can be no assurancethe FDA will accept data from trials conducted outside of the United States as adequate support of a marketing application, and it is not unusual for the FDAto require some Phase 3 clinical trial data to be generated in the United States. If the FDA does not accept the data from our international clinical trials, itwould likely result in the need for additional trials in the United States, which would be costly and time-consuming and could delay or permanently halt thedevelopment of one or more of our product candidates.If we experience delays in clinical testing, we will be delayed in commercializing our product candidates, our costs may increase and our business may beharmed.We do not know whether our clinical trials will be completed on schedule, or at all. Our product development costs will increase if we experience delays inclinical testing. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our productcandidates or allow our competitors to bring products to market before we do, which would impair our ability to successfully commercialize our productcandidates and may harm our business, results of operations and prospects.The commencement and completion of clinical development can be delayed or halted for a number of reasons, including: •difficulties obtaining regulatory approval to commence a clinical trial or complying with conditions imposed by a regulatory authorityregarding the scope or term of a clinical trial; •delays in reaching or failure to reach agreement on acceptable terms with prospective clinical research organizations, or CROs, and trial sites,which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; •deviations from the trial protocol by clinical trial sites and investigators, or failing to conduct the trial in accordance with regulatoryrequirements; •failure of our third parties, such as CROs, to satisfy their contractual duties or meet expected deadlines; •insufficient or inadequate supply or quantity of product material for use in trials due to delays in the importation and manufacture of clinicalsupply, including delays in the testing, validation, and delivery of the clinical supply of the investigational drug to the clinical trial sites; •delays in identification and auditing of central or other laboratories and the transfer and validation of assays or tests to be used; •delays in having subjects complete participation in a trial or return for post-treatment follow-up; •difficulties obtaining IRB or ethics committee approval to conduct a trial at a prospective site, or complying with conditions imposed by IRBsor ethics committees; •challenges recruiting and enrolling subjects to participate in clinical trials for a variety of reasons, including competition from other programsfor the treatment of similar conditions; •severe or unexpected drug-related adverse events experienced by subjects in a clinical trial; •difficulty retaining subjects who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack ofefficacy or personal issues, which are common among schizophrenia and MDD subjects who we require for our clinical trials of two of ourproduct candidates, roluperidone and MIN-117; •delays in adding new investigators and clinical sites; •withdrawal of clinical trial sites from clinical trials; •lack of adequate funding; and •clinical holds or termination imposed by the European Union national regulatory authorities, the FDA or IRBs or ethics committees.Clinical trials may also be delayed as a result of ambiguous or negative interim results. In addition, clinical trials may be suspended or terminated by us, anIRB or ethics committee overseeing the clinical trial at a trial site (with respect to that site), the European Union national regulatory authorities or the FDAdue to a number of factors, including: •failure to conduct the clinical trial in accordance with regulatory requirements, the trial protocols and applicable laws; •observations during inspection of the clinical trial operations or trial sites by the EMA, FDA or other comparable foreign regulatory authoritiesthat ultimately result in the imposition of a clinical hold;27 •unforeseen safety issues; or •lack of adequate funding to continue the clinical trial.Failure to conduct a clinical trial in accordance with regulatory requirements, the trial protocols and applicable laws may also result in the inability to use thedata from such trial to support product approval. Additionally, changes in regulatory requirements and guidance may occur, and we may need to amendclinical trial protocols to reflect these changes. Amendments may require us to resubmit our clinical trial protocols to the EMA, FDA, IRBs or ethicscommittees for reexamination, which may impact the costs, timing and successful completion of a clinical trial. Many of the factors that cause, or lead to, adelay in the commencement or completion of a clinical trial may also ultimately lead to the denial of regulatory approval of the associated productcandidate. If we experience delays in completion of, or if we terminate any of our clinical trials, our ability to obtain regulatory approval for our productcandidates may be materially harmed, and our commercial prospects and ability to generate product revenues will be diminished.We have no experience in advancing product candidates beyond Phase 2, which makes it difficult to assess our ability to develop and commercialize ourproduct candidates.We have no experience in progressing clinical trials past Phase 2, obtaining regulatory marketing approvals or commercializing product candidates. Wemerged with Sonkei and acquired Mind-NRG and have limited operating history since the respective merger and acquisition. We may encounter unforeseenexpenses, difficulties, complications, delays and other known or unknown factors in pursuing our business objectives. We expect our financial condition andoperating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond ourcontrol. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.If we are unable to enroll subjects in clinical trials, we will be unable to complete these trials on a timely basis or at all.The timely completion of clinical trials largely depends on subject enrollment. Many factors affect subject enrollment, including: •the size and nature of the subject population; •the number and location of clinical sites we enroll; •competition with other companies for clinical sites or subjects; •the eligibility and exclusion criteria for the trial; •the design of the clinical trial; •inability to obtain and maintain subject consents; •risk that enrolled subjects will drop out before completion; and •clinicians’ and subjects’ perceptions as to the potential advantages or disadvantages of the drug being studied in relation to other availabletherapies, including any new drugs that may be approved for the indications we are investigating.We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials in Europe and, we expect, eventually in the UnitedStates and, while we have agreements governing their committed activities, we have limited influence over their actual performance. We may also experiencedifficulties enrolling subjects for our clinical trials relating to roluperidone and MIN-117 due to the mental health of the subjects that we will need to enroll,related diagnoses and drop-out rates.Our clinical trials may fail to demonstrate adequately the safety and efficacy of our product candidates, which could prevent or delay regulatory approvaland commercialization, and also increase costs.Before obtaining regulatory approvals for the commercial sale of our product candidates, we must demonstrate through lengthy, complex and expensive pre-clinical testing and clinical trials that our product candidates are both safe and effective for use in each target indication, and failures can occur at any stageof testing. Clinical trials often fail to demonstrate safety and statistically significant efficacy of the product candidate studied for the target indication in laterstages of clinical development. For example, although we believe our Phase 2b trial with roluperidone met its primary endpoint as we observed thestatistically significant benefit of roluperidone over placebo in improving negative symptoms in patients with schizophrenia, we must conduct a Phase 3 trialwith roluperidone, which may fail to demonstrate safety and efficacy. Our Phase 2a trial with MIN-117, while we observed a reduction in depressivesymptoms, was designed to detect a signal of efficacy and not to demonstrate statistically significant differences between MIN-117 and placebo. Furtherclinical trials with MIN-117 will need to be statistically powered to demonstrate such differences. Regulatory authorities may find that our studies do notsupport, in combination with other studies, approval of our product candidates for the target indication. In addition, our product candidates may beassociated with undesirable side effects or have characteristics that are unexpected, which may result in abandoning their development or regulatoryauthorities restricting or denying marketing approval. For instance, prior clinical studies indicated that roluperidone and MIN-117 may cause adverse events,including, but not limited to, dizziness, vital sign changes, central nervous system events, cardiac events, including prolongation of the QT/QTc interval,28 and gastrointestinal events. Most product candidates that commence clinical trials are never approved by the applicable regulatory authorities.In the case of our product candidates, roluperidone and MIN-117, we are seeking to develop treatments for schizophrenia and MDD, which adds a layer ofcomplexity to our clinical trials and may delay regulatory approval. We do not fully understand the cause and pathophysiology of schizophrenia and MDD,and our results will rely on subjective subject feedback, which is inherently difficult to evaluate, can be influenced by factors outside of our control and canvary widely from day to day for a particular subject, and from subject to subject and site to site within a clinical study. The placebo effect may also have amore significant impact on our clinical trials.If our product candidates are not shown to be both safe and effective in clinical trials, we will not be able to obtain regulatory approval or commercialize ourproduct candidates.We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indicationsthat may be more profitable or for which there is a greater likelihood of success.Because we have limited financial and management resources, we focus on a limited number of research programs and product candidates. For instance, at thepresent time we are prioritizing the clinical trials and development of the most advanced of our product candidates, roluperidone. As a result, we may foregoor delay pursuit of opportunities with other product candidates, including MIN-117, seltorexant and MIN-301, or for other indications that later prove tohave greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable marketopportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield anycommercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we mayrelinquish valuable rights to that product candidate through collaboration, licensing or other arrangements in cases in which it would have been moreadvantageous for us to retain sole development and commercialization rights.Even if we complete the necessary clinical trials, we cannot predict when or if we will obtain marketing approval to commercialize a product candidate orthe approval may be for a more narrow indication than we expect.We cannot commercialize a product candidate until the appropriate regulatory authorities have reviewed and approved the product candidate. Even if ourproduct candidates demonstrate safety and efficacy in clinical trials, the regulatory agencies may not complete their review processes in a timely manner, orwe may not be able to obtain marketing approval from the relevant regulatory agencies. Additional delays may result if the EMA, FDA, an FDA AdvisoryCommittee, or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections basedupon additional government regulation from future legislation or administrative action, or changes in regulatory agency policy during the period of productdevelopment, clinical trials and the review process.Even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties, including ongoingregulatory obligations and continued regulatory review. Additionally, our product candidates, if approved, could be subject to labeling and otherrestrictions and market withdrawal and we may be subject to administrative sanctions or penalties if we fail to comply with regulatory requirements orexperience unanticipated problems with our products.Even if we obtain regulatory approval for a product candidate, product candidates may be approved for fewer or more limited indications, including morelimited subject populations, than we request, and regulatory authorities may require that contraindications, warnings, or precautions be included in theproduct labeling, including a black box warning, may grant approval contingent on the performance of costly post-marketing clinical trials or other post-market requirements, such as REMS, may require post-marketing surveillance, or may approve a product candidate with a label that does not include thelabeling claims necessary or desirable for the successful commercialization of that product candidate. For instance, in 2007, the FDA requested that makers ofall antidepressant medications update existing black box warnings about increased risk of suicidal thoughts and behavior in young adults, ages 18 to 24,during initial treatment. If approved for marketing, our drugs may be required to carry warnings similar to this and other class-wide warnings.Any approved products would further be subject to ongoing requirements imposed by the EMA, FDA, and other comparable foreign regulatory authoritiesgoverning the manufacture, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, import, export, advertising,promotion, marketing, recordkeeping and reporting of safety and other post-market information. If there are any modifications to the drug, including changesin indications, labeling, manufacturing processes or facilities, or if new safety issues arise, a new or supplemental NDA, post-implementation notification orother reporting may be required or requested, which may require additional data or additional pre-clinical studies and clinical trials.29 The EMA, FDA and other comparable foreign regulatory authorities will continue to closely monitor the safety profile of any product even after approval. Ifthe EMA, FDA or other comparable foreign regulatory authorities become aware of new adverse safety information after approval of any of our productcandidates, a number of potentially significant negative consequences could result, including: •we may suspend marketing of, or withdraw or recall, such product; •regulatory authorities may withdraw approvals of such product; •regulatory authorities may require additional warnings or otherwise restrict the product’s indicated use, label, or marketing; •the EMA, FDA or other comparable foreign regulatory bodies may issue safety alerts, Dear Healthcare Provider letters, press releases or othercommunications containing warnings about such product; •the FDA may require the establishment or modification of a REMS or the EMA or a comparable foreign regulatory authority may require theestablishment or modification of a similar strategy that may, for instance, require us to issue a medication guide outlining the risks of such sideeffects for distribution to subjects or restrict distribution of our products and impose burdensome implementation requirements on us; •regulatory authorities may require that we conduct post-marketing studies or surveillance; •we could be sued and held liable for harm caused to subjects or patients; and •our reputation may suffer.In addition, manufacturers of drug products and their facilities, including contracted facilities, are subject to continual review and periodic inspections bynational regulatory authorities in the European Union, the FDA and other regulatory authorities for compliance with current Good Manufacturing Practices,or cGMP, regulations and standards. The European Union cGMP guidelines are as set forth in Commission Directive 2003/94/EC of October 8, 2003. If we ora regulatory agency or authority discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, theproduct’s stability (changes in levels of impurities or dissolution profile) or problems with the facility where the product is manufactured, we may be subjectto reporting obligations, additional testing and additional sampling, and a regulatory agency or authority may impose restrictions on that product, themanufacturing facility, our suppliers, or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. If we, ourproduct candidates, the manufacturing facilities for our product candidates, our CROs, or other persons or entities working on our behalf fail to comply withapplicable regulatory requirements either before or after marketing approval, a regulatory agency may, depending on the stage of product development andapproval: •issue adverse inspectional findings; •issue Warning Letters or Untitled Letters; •mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners; •amend and update labels or package inserts; •require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due datesfor specific actions and penalties for noncompliance; •seek an injunction or impose civil, criminal and/or administrative penalties, damages or monetary fines or imprisonment; •suspend or withdraw regulatory approval; •suspend or terminate any ongoing clinical studies; •bar us from submitting or assisting in the submission of new regulatory applications; •refuse to approve pending applications or supplements to applications filed by us; •refuse to allow us to enter into government contracts; •suspend or impose restrictions on operations, including restrictions on marketing or manufacturing of the product, or the imposition of costlynew manufacturing requirements or use of alternative suppliers; or •seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.The occurrence of any event or penalty described above may inhibit our ability to commercialize our products and generate revenue.Our product candidates and the activities associated with their development and commercialization in the United States, including, but not limited to, theiradvertising and promotion, will further be heavily scrutinized by the FDA, the United States Department of Justice, the United States Department of Healthand Human Services’ Office of Inspector General, state attorneys general, members of Congress and the public. Violations of applicable law, includingadvertising, marketing and promotion of our products for unapproved (or off-label) uses, are subject to enforcement letters, inquiries and investigations, andcivil, criminal and/or administrative sanctions by regulatory agencies. Additionally, comparable foreign regulatory authorities will heavily scrutinizeadvertising and promotion of any product candidate that obtains approval outside of the United States. In this regard, advertising and promotion ofmedicines in the European Union is governed by Directive 2001/83 EC, as amended, and any such activities which we may undertake in the European Unionwill have to be in strict compliance with the same. Any advertising of a prescription medicinal product to the public and any30 promotion of a medicinal product that does not have marketing authorization or is not promoted in accordance with that marketing authorization isprohibited. Advertisements and promotions of medicinal products are monitored nationally in the European Union, and each country will have its ownadditional advertising laws and industry governing bodies, whose obligations may go further than those set out in Directive 2001/83. For instance, in theUnited Kingdom the code of practice of the Association of the British Pharmaceutical Industry (the lead United Kingdom trade association) is considerablystricter than applicable legislative requirements. Any violations and sanctions will similarly be decided and administered by the relevant country’s nationalauthority.In the United States, engaging in the impermissible promotion of products for off-label uses can also subject the entity engaging in such conduct to falseclaims litigation under federal and state statutes, which can lead to civil, criminal and/or administrative penalties, damages, monetary fines, disgorgement,exclusion from participation in Medicare, Medicaid and other federal healthcare programs, curtailment or restructuring of its operations and agreements thatmaterially restrict the manner in which it promotes or distributes drug products. Accordingly, we are subject to the federal civil False Claims Act, whichprohibits persons and entities from knowingly filing, or causing to be filed, a false claim, or the knowing use of false statements, to obtain payment from thefederal government. Certain suits filed under the civil False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of thegovernment and such individuals, commonly known as “whistleblowers,” may share in certain amounts paid by the entity to the government in fines orsettlement. When an entity is determined to have violated the civil False Claims Act, it may be required to pay up to three times the actual damages sustainedby the government, plus civil penalties for each separate false claim. Various states have also enacted laws modeled after the federal civil False Claims Act.We are also subject to the federal criminal False Claims Act, which imposes criminal fines or imprisonment against individuals or entities who make orpresent a claim to the government knowing such claim to be false, fictitious, or fraudulent. Additionally, we may be subject to civil monetary penalties thatmay be imposed against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthprogram that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.False Claims Act lawsuits against pharmaceutical companies have increased significantly in volume and breadth, leading to substantial civil and criminalsettlements regarding certain sales practices, including promoting off-label drug uses. This growth in litigation has increased the risk that a pharmaceuticalcompany will have to defend a false claims action, pay settlement fines or restitution, agree to comply with burdensome reporting and complianceobligations, and/or be excluded from Medicare, Medicaid and other federal and state healthcare programs. If we do not lawfully promote our products, wemay become subject to such litigation, which may have a material adverse effect on our business, financial condition and results of operations.While no definition of “off-label use” exists at the European Union level, promotion of a medicinal product for a purpose that has not been approved isstrictly prohibited. Such promotion also gives rise to criminal prosecution in the European Union, and national healthcare supervisory authorities mayimpose administrative fines. Engaging in such promotions in the European Union could also lead to product liability claims, in accordance with EU productliability regime under Directive 85/374.The EMA’s, FDA’s, and other applicable government agencies’ policies may change and additional government regulations may be enacted that couldprevent, limit or delay regulatory approval and marketing authorization, and the sale and promotion of our product candidates. If we are slow or unable toadapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we maylose any marketing approval that we may have obtained, and be subject to civil, criminal and administrative enforcement, which would adversely affect ourbusiness, prospects and ability to achieve or sustain profitability.The regulatory pathway for our product candidate, MIN-301, has not yet been determined. Depending on the pathway, we may be subject to differentregulatory requirements.MIN-301 is a peptide, and, as a peptide, may be subject to the Public Health Service Act, or PHSA, and the Food, Drug, and Cosmetic Act, or FDCA. We haveyet to meet with the FDA regarding the approval pathway for this product candidate. Based on the definition of a biologic in the PHSA, we believe that MIN-301 meets the definition of a biologic and, thus, we will need to submit a Biologics License Application, or BLA, for product approval. Moreover, based onan FDA intercenter agreement, we believe that MIN-301 will be regulated by the FDA’s Center for Drug Evaluation and Research. However, we intend todiscuss jurisdiction with the FDA to determine the appropriate regulatory pathway and corresponding requirements. Depending on the pathway, we may besubject to different regulatory requirements, including different regulatory and testing requirements, shorter or longer periods of market exclusivity, anddifferent approval processes for generic drug and biosimilar competitors.31 If the market opportunities for any product that we or our collaborators develop are smaller than we believe, our revenue may be adversely affected andour business may suffer.Our product candidates are intended for the treatment of schizophrenia, insomnia, MDD, and Parkinson’s disease. Our projections of both the number ofpeople who have these disorders or diseases, as well as the subsets of people who have the potential to benefit from treatment with our product candidates andwho will pursue such treatment, are based on our beliefs and estimates that may prove to be inaccurate. For instance, with respect to schizophrenia and MDD,our estimates are based on the number of patients that suffer from schizophrenia and MDD, but these disorders are difficult to accurately diagnose and highrates of patients may not seek or continue treatment. Our estimates and beliefs are also based on the potential market of other drugs in development forschizophrenia and MDD, which may prove to be inaccurate and our advantages over such drugs may not be, or may not be perceived to be, as significant aswe believe they are. If our estimates prove to be inaccurate, even if our products are approved, we may not be able to successfully commercialize them. Inaddition, the cause and pathophysiology of schizophrenia and MDD are not fully understood, and additional scientific understanding and future drug or non-drug therapies may make our product candidates obsolete.Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.As product candidates are developed through pre-clinical to late stage clinical trials towards approval and commercialization, it is common that variousaspects of the development program, such as manufacturing methods and formulation, are altered in an effort to optimize processes and results. Such changescarry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and affectthe results of planned clinical trials or future clinical trials to be conducted with the altered materials. Such changes may also require additional testing, EMAor FDA notification or EMA or FDA approval. This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition ofone or more clinical trials, increase clinical trial costs, delay approval of our product candidates and/or jeopardize our ability to commence product sales andgenerate revenue.Our failure to obtain regulatory approval in additional international jurisdictions would prevent us from marketing our product candidates outside theEuropean Union and the United States.We plan to seek regulatory approval to commercialize our product candidates in the European Union and, other than seltorexant, in the United States. Wealso expect to seek regulatory approval in additional foreign countries. To market and sell our products in other jurisdictions, we must obtain separatemarketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involveadditional testing. The time required to obtain approval may differ substantially from that required to obtain EMA or FDA approval. The regulatory approvalprocess outside the European Union and United States generally includes risks substantially similar to those associated with obtaining EMA or FDAapproval. In addition, in many countries outside the United States, we must secure product price and reimbursement approvals before regulatory authoritieswill approve the product for sale in that country or within a short time after receiving such marketing approval. Obtaining foreign regulatory approvals andcompliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction ofour products in certain countries. Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries andregulatory approval in one country does not ensure approval in any other country, while a failure or delay in obtaining regulatory approval in one countrymay have a negative effect on the regulatory approval process in others. Also, regulatory approval for any of our product candidates may be withdrawn. If wefail to comply with the regulatory requirements in international markets or do not receive applicable marketing approvals, our target market will be reducedand our ability to realize the full market potential of our product candidates will be harmed and our business will be adversely affected. We may not obtainforeign regulatory approvals on a timely basis, if at all, especially because some foreign jurisdictions require prior approval of a treatment by the domesticregulatory agency. Our failure to obtain approval of any of our product candidates by regulatory authorities in another country may significantly diminishthe commercial prospects of that product candidate and our business prospects could decline.We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than us.The biopharmaceutical industry is intensely competitive and subject to rapid and significant technological change. We face competition with respect to ourcurrent product candidates and will face competition with respect to any future product candidates from major pharmaceutical companies, specialtypharmaceutical companies and biotechnology companies worldwide. Many of our competitors have significantly greater financial, technical and humanresources. Smaller and early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large andestablished companies.Our competitors may obtain regulatory approval of their products more rapidly than us or may obtain patent protection or other intellectual property rightsthat limit our ability to develop or commercialize our product candidates. Our competitors may also32 develop drugs that are more effective, more convenient, more widely used, less costly and/or have a better safety profile than our products, and competitorsmay also be more successful than us in manufacturing and marketing their products.Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trialsites and subject registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.There are numerous currently approved therapies for treating the same diseases or indications for which our product candidates may be useful and many ofthese currently approved therapies act through mechanisms similar to our product candidates. Many of these approved drugs are well-established therapies orproducts and are widely accepted by physicians, patients and third-party payors. Some of these drugs are branded and subject to patent protection andregulatory exclusivity, while others are available on a generic basis. Insurers and other third-party payors may encourage the use of generic products orspecific branded products. Moreover, it is difficult to predict the effect that introduction of biosimilars into the market will have on sales of the referencebiologic product, which will depend on the FDA’s standards for interchangeability, the structure of government and commercial managed care formularies,and state laws on substitution of biosimilars. We expect that if our product candidates are approved, they will be priced at a significant premium overcompetitive generics and biosimilars. This may make it difficult for us to differentiate our products from currently approved therapies, which may adverselyimpact our business strategy. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy,convenience, tolerability, and safety in order to overcome price competition and to be commercially successful. If we are not able to compete effectivelyagainst our current and future competitors, our business will not grow and our financial condition and operations will suffer. Moreover, many companies aredeveloping new therapeutics, and we cannot predict what the standard of care will be as our product candidates progress through clinical development.Even if any of our drug candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-partypayors and others in the medical community necessary for commercial success.If any of our drug candidates receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-partypayors and others in the medical community necessary for commercial success. If our drug candidates do not achieve an adequate level of acceptance, wemay not generate significant revenue from drug sales and we may not become profitable. Our commercial success also depends on coverage and adequatereimbursement of our products by third-party payors, including government payors, which may be difficult or time-consuming to obtain, may be limited inscope or may not be obtained in all jurisdictions in which we may seek to market our products. The degree of market acceptance of our drug candidates, ifapproved for commercial sale, will depend on a number of factors, including: •the efficacy and perceived and potential advantages compared to alternative treatments, including any similar generics and biosimilars; •the timing of market introduction relative to alternative treatment; •our ability to offer our drugs for sale at competitive prices relative to alternative treatments; •the clinical indications for which the product candidate is approved; •the convenience and ease of administration compared to alternative treatments; •the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; •the strength of our marketing and distribution support; •the availability of third-party coverage and adequate reimbursement for our products or the willingness of patients to pay out-of-pocket in theabsence of coverage and adequate reimbursement by third-party payors; •unfavorable publicity relating to the products; •the prevalence and severity of any side effects; and •any restrictions on the use of our drugs together with other medications.Our focus on CNS disorders, in particular, exposes us to an increased risk that serious side effects and disease events, including suicide, will occur duringpatient use of our products, even if such side effects and disease events are unrelated to the use of our products. Most approved CNS medicines carry boxedwarnings for clinically significant adverse events, and our products may categorically need to carry such warnings as well.We currently have a limited marketing and sales organization. If we are unable to establish greater marketing and sales capabilities or enter intoagreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell our product candidates, ifapproved, or generate product revenues.We currently have a limited marketing or sales organization for the marketing, sales and distribution of pharmaceutical products. In order to commercializeany product candidates, we must build our marketing, sales, distribution, managerial and other non-technical33 capabilities or make arrangements with third parties to perform these services. We may not be successful in doing so on commercially reasonable terms or atall.If our product candidates receive regulatory approval, we intend to establish our sales and marketing organization with technical expertise and supportingdistribution capabilities to commercialize our product candidates, which will be expensive and time consuming and may require substantial investmentsprior to any product candidate being granted regulatory approval. In selling, marketing and distributing our products ourselves, we face a number ofadditional risks, including: •our inability to recruit and retain adequate numbers of effective sales and marketing personnel; •the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians on the clinical benefits of ourproducts to achieve market acceptance; •the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companieswith more extensive product lines; •the costs associated with training sales personnel on legal compliance matters and monitoring their actions; •liability for sales personnel failing to comply with the applicable legal requirements; and •unforeseen costs and expenses associated with creating an independent sales and marketing organization.Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of theseproducts.We may choose to collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force anddistribution systems or in lieu of our own sales force and distribution systems. If we enter into arrangements with third parties to perform sales, marketing anddistribution services for our products, the resulting revenues or the profitability from these revenues to us are likely to be lower than if we had sold, marketedand distributed our products ourselves. If we are unable to enter into such arrangements on acceptable terms or at all, we may not be able to successfullycommercialize any of our product candidates that receive regulatory approval. Depending on the nature of the third party relationship, we may have littlecontrol over such third parties, and any of these third parties may fail to devote the necessary resources and attention to sell, market and distribute ourproducts effectively.If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our futureproduct revenue will suffer and we may incur significant additional losses.Even if we commercialize any of our product candidates, these products may become subject to unfavorable pricing regulations, third-party reimbursementpractices or healthcare reform initiatives, which could harm our business.The laws that govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. Current and futurelegislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. In manycountries, the pricing review period begins after marketing or product licensing approval is granted. Some countries require approval of the sale price of adrug before it can be marketed or soon thereafter. Additionally, in some foreign markets, prescription pharmaceutical pricing remains subject to continuinggovernmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then besubject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenueswe generate from the sale of the product in that particular country. Adverse pricing limitations may hinder our ability to recoup our investment in one or moreproduct candidates even if our product candidates obtain marketing approval.In the European Union, the pricing and reimbursement of prescription drugs is controlled by each member state. In these countries, pricing negotiations withgovernmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can be considerable pressure bygovernments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures in the current economic climate inEurope. There is very limited harmonization on member state pricing and reimbursement practices in the European Union.Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states,can further reduce prices. In particular, Germany, Portugal and Spain have all introduced a number of short-term measures to lower healthcare spending,including mandatory discounts, clawbacks and price referencing rules, which could have a material adverse effect on our business.Our ability to commercialize any products successfully will depend in part on the extent to which coverage and adequate reimbursement for these productsand related treatments will be available from government health administration authorities and other34 third-party payors, such as private health insurers and health maintenance organizations. Government authorities and other third-party payors, determinewhich medications they will cover and establish reimbursement levels. Assuming we obtain coverage for a given product by a third-party payor, the resultingreimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed medicationsfor the treatment of their conditions, and their prescribing physicians, generally rely on third-party payors to reimburse all or part of the costs associated withtheir prescription drugs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significantportion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to new product acceptance. Coverage decisions may dependupon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available orsubsequently become available.Government authorities and other third-party payors are developing increasingly sophisticated methods of controlling healthcare costs, such as by limitingcoverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them withpredetermined discounts from list prices as a condition of coverage, are using restrictive formularies and preferred drug lists to leverage greater discounts incompetitive classes, and are challenging the prices charged for medical products. In addition, in the United States, federal programs impose penalties on drugmanufacturers in the form of mandatory additional rebates and/or discounts if commercial prices increase at a rate greater than the Consumer Price Index-Urban, and these rebates and/or discounts, which can be substantial, may impact our ability to raise commercial prices. Further, in the United States there hasbeen heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in severalCongressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing,reduce the cost of prescription drugs under government payor programs, and review the relationship between pricing and manufacturer patient programs.While some of the proposed measures will require authorization through additional legislation to become effective, U.S. Congress and the Trumpadministration have indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. We expect that additionalU.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay forhealthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.Additionally, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payors in the United States.Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. As a result, the coverage determination process is oftena time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, withno assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what thelevel of reimbursement will be. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtainmarketing approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfullycommercialize any product candidate for which we obtain marketing approval.There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes forwhich the drug is approved by the EMA, FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does notimply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interimreimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may only be temporary. Reimbursement rates may varyaccording to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may beincorporated into existing payments for other services. Prices paid for a drug also vary depending on the class of trade. Prices charged to governmentcustomers and certain customers that receive federal funds are subject to price controls, and private institutions may obtain discounts through grouppurchasing organizations or use formularies to leverage discounts. Net prices for drugs may be reduced by mandatory discounts or rebates required bygovernment healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they maybe sold at lower prices than in the United States.Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically,there have been several recent U.S. Congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things,bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government programreimbursement methodologies for drugs. At the federal level, Congress and the Trump administration have each indicated that it will continue to seek newlegislative and/or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementingregulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictionson certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to35 encourage importation from other countries and bulk purchasing. Our inability to promptly obtain coverage and profitable reimbursement rates from bothgovernment-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability toraise capital needed to commercialize products and our overall financial condition.Recently enacted and future legislation may increase the difficulty and cost for us to commercialize our product candidates and affect the prices we mayobtain.In the United States and many foreign jurisdictions, the legislative landscape continues to evolve. There have been a number of enacted or proposedlegislative and regulatory changes affecting the healthcare system and pharmaceutical industry that could, among other things, prevent or delay marketingapproval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidate for which weobtain marketing approval.For example, in March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and EducationReconciliation Act of 2010, or, collectively, the ACA, a law intended to, among other things, broaden access to health insurance, reduce or constrain thegrowth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insuranceindustries, impose new taxes and fees on pharmaceutical and medical device manufacturers and impose additional health policy reforms. Since the ACA’senactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges andamendments to the ACA in the future. For example, the Tax Cuts and Jobs Act of 2017, or the Tax Act, was enacted, which includes a provision repealing,effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying healthcoverage for all or part of a year that is commonly referred to as the “individual mandate”. Since the enactment of the Tax Act, there have been additionalamendments to certain provisions of the ACA, and we expect the current Trump administration and Congress will likely continue to seek to modify, repeal orotherwise invalidate the entirety, or certain provisions of the ACA. Additionally, on December 14, 2018, a Texas U.S. District Court Judge ruled that the ACAis unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. While the Texas U.S. District CourtJudge, as well as the Trump administration and CMS, have stated that the ruling will have no immediate effect pending appeal of the decision, it is unclearhow this decision, subsequent appeals, and other efforts to repeal and replace the ACA will impact the ACA and our business.Governments outside the United States tend to impose strict price controls, which may adversely affect our revenue, if any.In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings onspecific products and therapies. In some countries, particularly in the European Union, the pricing of prescription pharmaceuticals is subject to governmentalcontrol. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a drug.To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a health technology assessment that comparesthe cost-effectiveness of our drug candidate to other available therapies. There can be no assurance that our products will be considered cost-effective, that anadequate level of reimbursement will be available or that a foreign country’s reimbursement policies will not adversely affect our ability to sell our productsprofitably.If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materiallyharmed.Our international operations are subject to foreign currency and exchange rate risks.Because we plan to continue to conduct our clinical trials in Europe, we are exposed to currency fluctuations and exchange rate risks. The costs of our CROsmay be incurred in Euros and we may pay them in Euros, however, we expect to keep the substantial portion of our cash, cash equivalents, marketablesecurities and private placement transactions, in United States Dollars. Therefore, fluctuations in foreign currencies, especially the Euro, could significantlyimpact our costs of conducting clinical trials. In addition, we may have to seek additional funding earlier than expected, which may not be available onacceptable terms or at all. Changes in the applicable currency exchange rates might negatively affect the profitability and business prospects of the thirdparties conducting our future clinical trials. This might cause such third parties to demand higher fees or discontinue their operations. These situations couldin turn increase our costs or delays our clinical development, which could have a material adverse effect on our business, financial condition and results ofoperations.36 A variety of risks associated with international operations could materially adversely affect our business.We expect to engage in significant cross-border activities, and we will be subject to risks related to international operations, including: •different regulatory requirements for maintaining approval of drugs in foreign countries; •reduced protection for contractual and intellectual property rights in certain countries; •unexpected changes in tariffs, trade barriers and regulatory requirements; •economic weakness, including inflation, or political instability in particular foreign economies and markets; •compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; •foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doingbusiness in another country; •workforce uncertainty in countries where labor unrest is more common than in North America; •tighter restrictions on privacy and the collection and use of patient data; and •business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons,floods and fires.If any of these issues were to occur, our business could be materially harmed.If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.Our ability to compete in the highly competitive biotechnology and pharmaceuticals industries depends upon our ability to attract and retain highlyqualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel, especially Dr. RemyLuthringer, whose services are critical to the successful implementation of our product candidate development and regulatory strategies. We do not maintain“key man” insurance policies on the lives of these individuals or the lives of any of our other employees. In order to induce valuable employees to continuetheir employment with us, we have provided stock options that vest over time. The value to employees of stock options that vest over time is significantlyaffected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from othercompanies.Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us onshort notice. Pursuant to their employment arrangements, each of our executive officers may voluntarily terminate their employment at any time by providingas little as thirty days advance notice. Our employment arrangements, other than those with our executive officers, provide for at-will employment, whichmeans that any of our employees (other than our executive officers) could leave our employment at any time, with or without notice. The loss of the servicesof any of our executive officers or other key employees and our inability to find suitable replacements could potentially harm our business, financialcondition and prospects. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level, and seniormanagers as well as junior, mid-level, and senior scientific and medical personnel.We may not be able to attract or retain qualified management and scientific personnel in the future due to the intense competition for a limited number ofqualified personnel among biopharmaceutical, biotechnology, pharmaceutical and other businesses. Many of the other pharmaceutical companies that wecompete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do. Theyalso may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high qualitycandidates than what we have to offer. If we are unable to continue to attract and retain high quality personnel, the rate and success at which we can developand commercialize product candidates will be limited.We will need to grow the size of our organization, and we may experience difficulties in managing this growth.As of December 31, 2018, we had 13 full-time employees. As our development and commercialization plans and strategies develop, we expect to needadditional managerial, operational, sales, marketing, financial and other resources. Future growth would impose significant added responsibilities onmembers of management, including: •managing our clinical trials effectively; •identifying, recruiting, maintaining, motivating and integrating additional employees; •managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, collaborators,contractors and other third parties;37 •improving our managerial, development, operational and finance systems; and •developing our compliance infrastructure and processes to ensure compliance with complex regulations and industry standards regarding usand our product candidates.As our operations expand, we expect that we will need to manage additional relationships with various strategic partners, collaborators, suppliers and otherthird parties. Our future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on ourability to manage any future growth effectively. To that end, we must be able to manage our development efforts and clinical trials effectively and hire, trainand integrate additional management, administrative and sales and marketing personnel. We may not be able to accomplish these tasks, and our failure toaccomplish any of them could prevent us from successfully growing our company.We are party to a loan and security agreement that contains operating and financial covenants that may restrict our business and financing activities.On January 16, 2015, we entered into a Loan and Security Agreement with Oxford Finance LLC and Silicon Valley Bank, providing for term loans to us in anaggregate principal amount of up to $15 million (the “Term Loans”), in two tranches of $10 million and $5 million, respectively. We borrowed the firsttranche in January 2015. In June 2016, we irrevocably elected not to borrow the additional $5 million available under the Term Loans. Borrowings under thisloan and security agreement are secured by substantially all of our assets, excluding certain intellectual property rights. The loan and security agreementrestricts our ability, among other things, to: •sell, transfer or otherwise dispose of any of our business or property, subject to limited exceptions; •make material changes to our business or management; •enter into transactions resulting in significant changes to the voting control of our stock; •make certain changes to our organizational structure; •consolidate or merge with other entities or acquire other entities; •incur additional indebtedness or create encumbrances on our assets; •pay dividends, other than dividends paid solely in shares of our common stock, or make distributions on and, in certain cases, repurchase ourstock; •enter into transactions with our affiliates; •repay subordinated indebtedness; or •make certain investments.In addition, we are required under our loan agreement to comply with various affirmative operating covenants. The operating covenants and restrictions andobligations in our loan and security agreement, as well as any future financing agreements that we may enter into, may restrict our ability to finance ouroperations, engage in business activities or expand or fully pursue our business strategies. Our ability to comply with these covenants may be affected byevents beyond our control, and we may not be able to meet those covenants. A breach of any of these covenants could result in a default under the loan andsecurity agreement, which could cause all of the outstanding indebtedness under the facility to become immediately due and payable and eliminate oureligibility to receive additional loans under the agreement.If we are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, either as when such obligationsbecome due, when they mature, or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all,which may negatively impact our business operations and financial condition.The Term Loans matured on August 1, 2018 and we made a final repayment in the amount of $510 thousand on such date.Future acquisitions, mergers or joint ventures could disrupt our business and otherwise harm our business.We actively evaluate various strategic transactions on an ongoing basis and may acquire other businesses, products or technologies as well as pursuestrategic alliances, joint ventures or investments in complementary businesses. We merged with Sonkei in November 2013 and acquired Mind-NRG inFebruary 2014, but otherwise do not have any substantial experience integrating or managing acquired businesses or assets. Strategic transactions expose usto many risks, including: •disruption in our relationships with collaborators or suppliers as a result of such a transaction; •unanticipated liabilities related to acquired companies; •difficulties integrating acquired personnel, technologies and operations into our existing business; •retention of key employees;38 •diversion of management time and focus from operating our business to management of strategic alliances or joint ventures or acquisitionintegration challenges; •increases in our expenses and reductions in our cash available for operations and other uses; and •possible write-offs or impairment charges relating to acquired businesses.Foreign acquisitions, such as the acquisition of Mind-NRG, a Swiss company, involve unique risks in addition to those mentioned above, including thoserelated to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risksassociated with specific countries.Also, the anticipated benefit of any strategic alliance, joint venture or acquisition may not materialize. Future acquisitions or dispositions could result inpotentially dilutive issuances of our equity securities, the incurrence of debt (including on terms that are unfavorable to us that we are unable to repay or thatmay place burdensome restrictions on our operations), contingent liabilities or amortization expenses or write-offs of goodwill, any of which could harm ourfinancial condition. We cannot predict the number, timing or size of future joint ventures or acquisitions, or the effect that any such transactions might haveon our operating results.If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our productcandidates.We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercializeany products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing,manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warnof dangers inherent in the product, negligence, strict liability, and a breach of warranties brought by subjects enrolled in our clinical trials, patients,healthcare providers or others using, administering or selling our products. Claims could also be asserted under state consumer protection acts. If we cannotsuccessfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our productcandidates, if approved. Even successful defense would require significant financial and management resources. Regardless of the merits or eventualoutcome, liability claims may result in: •decreased demand for our product candidates or products that we may develop; •termination of clinical trial sites or entire trial programs; •injury to our reputation and significant negative media attention; •withdrawal of clinical trial participants; •initiation of investigations by regulators; •costs to defend the related litigation; •a diversion of management’s time and our resources; •substantial monetary awards to trial participants or patients; •product recalls, withdrawals or labeling revisions, marketing or promotional restrictions; •loss of revenues from product sales; and •the inability to commercialize our product candidates.Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims couldprevent or inhibit the commercialization of products we develop. We do not currently carry any product liability insurance. Although we anticipateobtaining and maintaining such insurance in line with our needs for our upcoming trials, such insurance may be more costly than we anticipate and any claimthat may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by such insurance or that isin excess of the limits of such insurance coverage. We also expect our insurance policies will also have various exclusions, and we may be subject to aproduct liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed ourcoverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.Our business and operations would suffer in the event of system failures.Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are vulnerableto damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have notexperienced any such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it couldresult in a material disruption of our drug development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinicaltrials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any39 disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information,we could incur liability and the further development of our product candidates could be delayed.If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial condition,results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.We are required to comply with the SEC’s rules that implement Section 404 of the Sarbanes-Oxley Act and the Committee on Sponsoring Organizations, orCOSO, Report on Internal Control – Integrated Framework, which require, among other things, that we maintain effective internal controls for financialreporting and disclosure controls and procedures. Under Section 404 of the Sarbanes-Oxley Act, we are required to furnish a report by management on, amongother things, the effectiveness of our internal control over financial reporting. This assessment must include disclosure of any material weaknesses identifiedby management in our internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, ininternal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financialstatements will not be prevented or detected on a timely basis. Further, in our first annual report required to be filed with the SEC following the date we are nolonger an “emerging growth company,” as defined in the JOBS Act, our independent registered public accounting firm will be required to attest to theeffectiveness of our internal control over financial reporting.Our compliance with Section 404 requires that we compile the system and process documentation necessary to perform an appropriate evaluation. During theevaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert thatour internal control over financial reporting is effective. While we have established certain procedures and control over our financial reporting processes, wecannot assure you that these efforts will prevent restatements of our financial statements in the future. If we identify any future significant deficiencies ormaterial weaknesses, the accuracy and timing of our financial reporting may be adversely affected and we may be unable to maintain compliance withsecurities law requirements regarding timely filing of periodic reports. In addition, investors’ perceptions that our internal controls are inadequate or that weare unable to produce accurate financial statements on a timely basis may harm our stock price and business prospects. Failure to remedy any materialweakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, couldalso restrict our future access to the capital markets.Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.We are subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We designed our disclosurecontrols and procedures to reasonably assure us that the information we disclose in reports we file in accordance with the Exchange Act is accurate, complete,reviewed by management and reported within the required time period. We believe that any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error ormistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorizedoverride of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not bedetected.Prior to November 2013, we operated without full-time employees, relying on the services of consultants, including representatives of our former affiliate,Care Capital LLC, to provide certain accounting and finance functions. We have since hired personnel and continue to develop our disclosure controlprocedures; however, if we are unsuccessful in building an appropriate infrastructure, or unable to develop procedures and controls to ensure timely andaccurate reporting, we may be unable to meet our disclosure requirements under the Exchange Act, which could adversely affect the market price of ourcommon stock and impair our access to the capital markets.Our employees, independent contractors, principal investigators, CROs, consultants, commercial partners and vendors may engage in misconduct or otherimproper activities, including non-compliance with regulatory standards and requirements.We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees and independent contractors, such as principal investigators,CROs, manufacturers, consultants, commercial partners and vendors, could include failures to comply with EMA or FDA regulations, to provide accurateinformation to the FDA, to comply with manufacturing standards we have established, to comply with European, federal and state healthcare fraud and abuselaws, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and other businessarrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices. Theselaws may restrict or prohibit a wide range of business activities, including, but not limited to certain activities related to research, manufacturing,40 distribution, pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee andindependent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, informationobtained in the course of clinical trials, which could result in sanctions, monetary penalties, and serious harm to our reputation. In addition, federalprocurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code ofbusiness ethics and conduct.We have adopted a code of business ethics and conduct, but it is not always possible to identify and deter employee and independent contractor misconduct,and the precautions we take to detect and prevent improper activities may not be effective in controlling unknown or unmanaged risks or losses or inprotecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If anysuch actions are instituted against us, those actions could have a significant impact on our business, including the imposition of civil, criminal andadministrative penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid andother federal healthcare programs, contractual damages, reputational harm, additional reporting requirements and oversight if we become subject to acorporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, diminished profits and future earnings andcurtailment or restructuring of our operations, any of which could adversely affect our ability to operate.Any relationships with healthcare professionals, principal investigators, consultants, customers (actual and potential) and third-party payors inconnection with our current and future business activities may and may continue to be subject, directly or indirectly, to federal and state healthcare fraudand abuse laws, false claims laws, marketing expenditure tracking and disclosure (or “sunshine”) laws, government price reporting, and healthinformation privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face penalties, contractualdamages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations.Our business operations and activities may be directly, or indirectly, subject to various federal, state and local healthcare laws, including, without limitation,the federal Anti-Kickback Statute and the federal False Claims Act. These laws may impact, among other things, our current activities with principalinvestigators and research subjects, as well as proposed and future sales, marketing and education programs. In addition, we may be subject to patient dataprivacy and security regulation by the federal government, state governments and foreign jurisdictions in which we conduct our business. The healthcarelaws and regulations that may affect our ability to operate include, but are not limited to: •The federal Anti-Kickback Statute, which prohibits, among other things, individuals and entities from knowingly and willfully soliciting,receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or inkind, to induce, or in return for, the referral of an individual for the furnishing or arranging for the furnishing of any item or service, or thepurchase, lease, order, arrangement for, or recommendation of the purchase, lease, or order of any good, facility, item or service for whichpayment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. •The federal civil False Claims Act, which imposes civil penalties, including through civil whistleblower or qui tam actions, against individualsor entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that arefalse or fraudulent; knowingly making, using or causing to be made or used, a false record or statement to get a false or fraudulent claim paid orapproved by the government; conspiring to defraud the government by getting a false or fraudulent claim paid or approved by the government;or knowingly making, using or causing to be made or used a false record or statement to avoid, decrease or conceal an obligation to pay moneyto the federal government. •The federal criminal False Claims Act, which imposes criminal fines or imprisonment against individuals or entities who make or present aclaim to the government knowing such claim to be false, fictitious or fraudulent. •The civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to havepresented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that wasnot provided as claimed or is false or fraudulent. •The Veterans Health Care Act of 1992 that requires manufacturers of “covered drugs” to offer them for sale to certain federal agencies,including but not limited to, the Department of Veterans Affairs, on the Federal Supply Schedule, which requires compliance with applicablefederal procurement laws and regulations and subjects manufacturers to contractual remedies as well as administrative, civil and criminalsanctions. •The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes thatprohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by meansof false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, anyhealthcare benefit program, regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a health carebenefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or41 covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for,healthcare benefits, items or services relating to healthcare matters. •HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respectiveimplementing regulations, which impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses aswell as their respective business associates that perform services for them that involve individually identifiable health information, relating tothe privacy, security and transmission of individually identifiable health information without appropriate authorization, including mandatorycontractual terms as well as directly applicable privacy and security standards and requirements. •The federal Physician Payments Sunshine Act and its implementing regulations requires manufacturers of drugs, devices, biologicals andmedical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certainexceptions) to report annually to the United States Department of Health and Human Services, or HHS, information related to payments or othertransfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals,as well as ownership and investment interests held by physicians and their immediate family members. •Federal consumer protection and unfair competition laws, which broadly regulate marketplace and other activities that potentially harmconsumers. •State law equivalents of each of the above federal laws, such as anti-kickback, false claims, consumer protection and unfair competition lawswhich may apply to our business practices, including but not limited to our research, distribution, sales and marketing arrangements and ourpractices for submitting claims involving healthcare items or services reimbursed by any third-party payors, including commercial insurers.State laws may also (1) require that pharmaceutical companies comply with the pharmaceutical industry’s voluntary compliance guidelines andthe relevant compliance guidance promulgated by the federal government that otherwise restrict the payments that may be made to healthcareproviders, (2) require that drug manufacturers file reports with states regarding marketing information, such as the tracking and reporting ofgifts, compensations and other remuneration and items of value provided to healthcare professionals and entities (compliance with suchrequirements may require investment in infrastructure to ensure that tracking is performed properly, and some of these laws result in the publicdisclosure of various types of payments and relationships, which could potentially have a negative effect on a pharmaceutical company’sbusiness and/or increase enforcement scrutiny of its activities), (3) require the reporting of information related to drug pricing, ,and (4) governthe privacy and security of health information in certain circumstances. State laws are not uniform, may differ from each other in significantways and may be applied with differing effects.In addition, any sales of our products or product candidates once commercialized outside the United States will also likely subject us to foreign equivalentsof the healthcare laws mentioned above, among other foreign laws such as, for instance, the UK Bribery Act 2010 other national anti-corruption legislationmade as a consequence of a member states’ adherence to the OECD Convention on Combating Bribery of Foreign Public Officials in International BusinessTransactions, the European Union data protection regime set out in Directive 95/46/EC as implemented nationally by the member states, and EuropeanUnion consumer laws protecting against defective products, including Directive 85/374/EEC. In addition, there are national laws and codes which arecomparable to the United States “sunshine laws,” including certain provisions under the UK ABPI Code of Practice and French disclosure requirements onmanufacturers to publicly disclose interactions with French health care professionals.Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmentaland enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpretingapplicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of the laws described above or any othergovernmental regulations that apply to us, we may be subject to, without limitation, civil, criminal and administrative penalties, damages, monetary fines,disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractualdamages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporateintegrity agreement or similar agreement to resolve allegations of non-compliance with these laws and curtailment or restructuring of our operations, any ofwhich could adversely affect our ability to operate.We are subject to the Foreign Corrupt Practices Act.The Foreign Corrupt Practices Act, or the FCPA, prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering ofanything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreignentity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in theUnited States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions ofthe corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for internationaloperations. Activities that42 violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, anddebarment from government contracts.We and our service providers are subject to EU data protection laws. Failure to comply with such laws could harm our financial condition and operatingresults and involve distraction from other aspects of our business.In October 2015, the Court of Justice of the European Union (CJEU) invalidated the EU-U.S. Safe Harbor Framework, which had established a means forlegitimating the transfer of personal data, as the term is used in the context of the EU Data Protection Directive, to the U.S. and required U.S.-based companiesthat have certified with the Department of Commerce as part of the Safe Harbor Framework to provide assurance that they are adhering to relevant Europeanstandards for data protection. As Minerva is not Safe Harbor certified, the CJEU’s ruling invalidating the Safe Harbor has no direct effect on Minerva’s owncompliance with EU data protection laws; however, in light of the CJEU’s recent decision, we are reviewing the practices of third party service providers withwhom we work, which include the transfer of personal data between the European Economic Area (“EEA”) and the U.S. to ensure that all data transfers to uscomply with EU data protection laws. In February 2016, the EU Commission announced that it had reached agreement with the U.S. replacement regime tothe Safe Harbor Framework. We require our EEA-based services providers, and U.S.-based service providers undertaking clinical trials on our behalf in theEEA, to confirm that all of the personal data which we receive from them is legitimately transferred to us. In many cases we believe that patients and subjectsconsent to the transfer of their data in a manner which satisfies the requirements of EU data protection law. Where appropriate and pending the ratification ofthe replacement regime, we may require third party service providers to adopt an alternative means of legitimizing data transfers from the EEA, such as theStandard Contractual Clauses which have been approved by the EU Commission as a means of transferring data to the U.S. These confirmations and, ifnecessary, additional actions may involve substantial time and expense to both Minerva and its third party service providers, and could divert management’sattention and resources from other aspects of our business. If data transfers to the U.S. are not legitimized, the EU data protection authorities can impose anumber of different sanctions, including fines and, ultimately, a prohibition on transfers, any of which could harm our business, financial condition andoperating results.Risks Related to Our Dependence on Third PartiesWe currently rely and continue to expect to rely on third parties to conduct our future clinical trials. The failure of these third parties to successfully carryout their contractual duties or meet expected deadlines could substantially harm our business because we may not obtain regulatory approval for orcommercialize our product candidates in a timely manner or at all.We plan to rely upon third-party CROs to monitor and manage data for our future clinical programs. We will rely on these parties for execution of our clinicaltrials, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordancewith the applicable protocol and legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.We and our CROs are required to comply with current GCPs, which are regulations and guidelines enforced by the FDA, the Competent Authorities of theMember States of the European Economic Area and comparable foreign regulatory authorities for all of our products in clinical development. Regulatoryauthorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our CROs fail to complywith applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the EMA, FDA or comparable regulatory authorities mayrequire us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatoryauthority, such regulatory authority will determine that any of our clinical trials comply with GCP requirements. In addition, we must conduct our clinicaltrials with product produced under cGMP requirements. Failure to comply with these regulations may require us to repeat pre-clinical and clinical trials,which would delay the regulatory approval process.Our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not theydevote sufficient time and resources to our ongoing clinical, nonclinical and pre-clinical programs. These CROs may also have relationships with othercommercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities that could harmour competitive position. If necessary, switching or adding CROs involves substantial cost and requires extensive management time and focus. In addition,there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desiredclinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similarchallenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, prospects, financial conditionand results of operations.If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines or if the quality or accuracy of the clinical data theyobtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended,delayed or terminated, we may need to conduct additional trials, and we may not be able to obtain regulatory approval for or successfully commercialize ourproduct candidates. As a result, our results of operations and the43 commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. To theextent we are unable to successfully identify and manage the performance of third-party service providers in the future, our business may be adverselyaffected.We contract with third parties for the manufacturing of our product candidates for pre-clinical and clinical testing and expect to continue to do so forcommercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products, orsuch quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.We do not have any manufacturing facilities. For our product candidates, we rely, and expect to continue to rely, on third parties for the manufacturing of ourdrug candidates for pre-clinical and clinical testing, as well as for commercial manufacture if any of our drug candidates receive marketing approval. Thisreliance on third parties increases the risk that we will not have sufficient quantities of our drug candidates or drugs, or such quantities at an acceptable costor quality, which could delay, prevent or impair our ability to timely conduct our clinical trials or our other development or commercialization efforts.We also expect to rely on third-party manufacturers or third-party collaborators for the manufacturing of commercial supply of any other drug candidates forwhich we or our collaborators obtain marketing approval. We may be unable to establish any agreements with third-party manufacturers or to do so onacceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks,including: •reliance on the third party for regulatory compliance and quality assurance; •the possible breach of the manufacturing agreement by the third party; •the possible misappropriation of our proprietary information, including our trade secrets and know-how; •disruption and costs associated with changing suppliers, including additional regulatory filings; and •the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us.Moreover, the facilities used by our contract manufacturers to manufacture our products must be approved by the FDA pursuant to inspections that will beconducted after we submit our marketing application to the FDA. Other national regulatory authorities have comparable powers. While we are ultimatelyresponsible for the manufacture of our product candidates, other than through our contractual arrangements, we do not control the manufacturing process of,and are completely dependent on, our contract manufacturing partners for compliance with cGMP requirements, for manufacture of both active drugsubstances and finished drug products. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and thestrict regulatory requirements of the FDA or other regulatory authorities, we will not be able to secure and/or maintain regulatory approval for theirmanufacturing facilities. In addition, other than through our contractual agreements, we have no control over the ability of our contract manufacturers tomaintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve thesefacilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturingfacilities, which would significantly impact our ability to develop, obtain marketing approval for or market our product candidates, if approved.Further, our suppliers are subject to regulatory requirements, covering manufacturing, testing, quality control, and record keeping relating to our productcandidates, and subject to ongoing inspections by the regulatory agencies. Failure by any of our suppliers to comply with applicable regulations may resultin long delays and interruptions to our manufacturing capacity while we seek to secure another supplier that meets all regulatory requirements, as well asmarket disruption related to any necessary recalls or other corrective actions.Third-party manufacturers may not be able to comply with cGMP, regulations or similar regulatory requirements outside the United States. Additionally, ourfailure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinicalhold or termination, fines, imprisonment, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures, refusal toallow product import or export, Warning Letters, Untitled Letters, or recalls of drug candidates or drugs, operating restrictions and criminal prosecutions, anyof which could significantly and adversely affect supplies of our drugs.Our drug candidates and any drugs that we may develop may compete with other drug candidates and drugs for access to manufacturing facilities. There are alimited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us. Any performance failure on the partof our existing or future manufacturers could delay clinical development or marketing approval. We do not currently have arrangements in place forredundant supply or a second source for bulk drug substance. If our current contract manufacturers cannot perform as agreed, we may be required to replacesuch manufacturers and we may incur added costs and delays in identifying and qualifying any such replacement.44 Our current and anticipated future dependence upon others for the manufacturing of our drug candidates or drugs may adversely affect our future profitmargins and our ability to commercialize any drugs that receive marketing approval on a timely and competitive basis.If our third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable fordamages.Our research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials, by ourthird-party manufacturers. Our manufacturers are or will be subject to federal, state and local laws in the United States and in Europe governing the use,manufacture, storage, handling and disposal of medical, radioactive and hazardous materials. Although we believe that our manufacturers’ procedures forusing, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contaminationor injury resulting from medical, radioactive or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city,state, federal authorities or other equivalent national authorities may curtail the use of these materials and interrupt our business operations. In the event of anaccident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance forliabilities arising from medical radioactive or hazardous materials. Compliance with applicable environmental laws is expensive, and current or futureenvironmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition orresults of operations.We may engage third party collaborators to market and commercialize our product candidates, who may fail to effectively commercialize our productcandidates.We may utilize strategic partners or contract sales forces, where appropriate, to assist in the commercialization of our product candidates, if approved. Wecurrently possess limited resources and may not be successful in establishing collaborations or co-promotion arrangements on acceptable terms, if at all. Wealso face competition in our search for collaborators and co-promoters. By entering into strategic collaborations or similar arrangements, we will rely on thirdparties for financial resources and for development, commercialization, sales and marketing and regulatory expertise. Any collaborators may fail to developor effectively commercialize our product candidates because they cannot obtain the necessary regulatory approvals, they lack adequate financial or otherresources or they decide to focus on other initiatives. Any failure to enter into collaboration or co-promotion arrangements or the failure of our third partycollaborators to successfully market and commercialize our product candidates would diminish our revenues and harm our results of operations. In addition,conflicts may arise with our collaborators, such as conflicts concerning the interpretation of clinical data, the achievement of milestones, the interpretation offinancial provisions or the ownership of intellectual property. If any conflicts arise with our collaborators, they may act in their self-interest, which may beadverse to our best interest.We depend on our collaborations with Mitsubishi Tanabe Pharma Corporation, or MTPC, and Janssen Pharmaceutica NV and could be seriously harmedif our license agreements with MTPC and Janssen were terminated.We exclusively license roluperidone and MIN-117 from MTPC, with the rights to develop, sell and import roluperidone and MIN-117 globally, excludingmost of Asia.Our co-development and license agreement with Janssen provides us with European Union commercialization rights for seltorexant and the right to royaltieson any sales of seltorexant outside of the European Union. We have assumed strategic control for matters related to the clinical development of seltorexant ininsomnia and all financial responsibility for Phase 3 development costs for seltorexant in this indication and will only realize revenues from seltorexant if itis approved and if our license agreement with Janssen is not terminated by Janssen. Janssen may terminate our license agreement following a material breachby us or certain insolvency events, including if we are unable to fund our portion of the development costs. As a result, we may never realize any revenuesfrom the commercialization of seltorexant, even if approved. In addition, at certain development milestones, including the completion of a single dosePhase 1 clinical trial of seltorexant in patients with MDD, Janssen has the right to opt out of its obligation to fund further development, and we may beunable to fund such development without Janssen’s financial support.Even if we receive revenues on European Union sales or royalties on sales outside of the European Union under the Janssen license agreement, we may notreceive revenues that equal or exceed the amount we are obligated to invest in seltorexant’s clinical development under the agreement. As a result, thelicense agreement for seltorexant may never result in any profits to us and may have a material adverse effect on us or our business prospects.45 We may not be successful in establishing new collaborations which could adversely affect our ability to develop future product candidates andcommercialize future products.We are collaborating with Janssen on the development of seltorexant. We may also seek to enter into additional product collaborations in the future,including alliances with other biotechnology or pharmaceutical companies, to enhance and accelerate the development of our future product candidates andthe commercialization of any resulting products. We face significant competition in seeking appropriate collaborators and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish collaborations or other alternative arrangements for any futureproduct candidates because our research and development pipeline may be insufficient, our product candidates may be deemed to be at too early of a stage ofdevelopment for collaboration efforts and/or third parties may view our product candidates as lacking the requisite potential to demonstrate safety andefficacy. As a result, we may have to delay the development of a product candidate and attempt to raise significant additional capital to fund development.Even if we are successful in our efforts to establish collaborations, the terms that we agree upon may not be favorable to us and we may not be able tomaintain such collaborations if, for example, development or approval of a product candidate is delayed or sales of an approved product are disappointing.Risks Related to Intellectual PropertyIf we are unable to obtain or protect intellectual property rights, we may not be able to compete effectively in our market.Our success depends in significant part on our and our licensors’, licensees’ or collaborators’ ability to establish, maintain and protect patents and otherintellectual property rights and operate without infringing the intellectual property rights of others. We have filed numerous patent applications both in theUnited States and in foreign jurisdictions to obtain patent rights to inventions we have discovered. We have also licensed from third parties rights to patentportfolios. None of these licenses give us the right to prepare, file and prosecute patent applications and maintain patents we have licensed, although we mayprovide comments on prosecution matters, which our licensors may or may not choose to follow. If our licensors elect to discontinue prosecution ormaintenance of our licensed patents, we have the right, at our expense, to pursue and maintain those patents and applications.The patent prosecution process is expensive and time-consuming, and we and our current or future licensors, licensees or collaborators may not be able toprepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we or our licensors,licensees or collaborators will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before itis too late to obtain patent protection on them. Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecutionof patent applications, or to maintain the patents, covering technology that we license from or license to third parties and are reliant on our licensors,licensees or collaborators. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of ourbusiness. If our current or future licensors, licensees or collaborators fail to establish, maintain or protect such patents and other intellectual property rights,such rights may be reduced or eliminated. If our licensors, licensees or collaborators are not fully cooperative or disagree with us as to the prosecution,maintenance or enforcement of any patent rights, such patent rights could be compromised. Because the issuance of a patent is not conclusive as to itsinventorship, scope, validity or enforceability, issued patents that we own or have licensed from third parties may be challenged in the courts or patent officesin the United States and abroad. Such challenges may result in the loss of patent protection, the narrowing of claims in such patents or the invalidity orunenforceability of such patents, which could limit our ability to stop others from using or commercializing similar or identical technology and products, orlimit the duration of the patent protection for our technology and products.The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has inrecent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our and our current or futurelicensors’, licensees’ or collaborators’ patent rights are highly uncertain. Our and our licensors’, licensees’ or collaborators’ pending and future patentapplications may not result in patents being issued that protect our technology or products, in whole or in part, or that effectively prevent others fromcommercializing competitive technologies and products. The patent examination process may require us or our licensors, licensees or collaborators to narrowthe scope of the claims of our or our licensors’, licensees’ or collaborators’ pending and future patent applications, which may limit the scope of patentprotection that may be obtained. Our and our licensors’, licensees’ or collaborators’ patent applications cannot be enforced against third parties practicing thetechnology claimed in such applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover thetechnology.One or more of our owned or licensed patents directed to our proprietary products or technologies may expire or have limited commercial life before theproprietary product or technology is approved for marketing in a relevant jurisdiction.Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting our product candidatesmight expire before or shortly after our product candidates obtain regulatory approval, which may subject us to46 increased competition and reduce or eliminate our ability to recover our development costs. As a result, our owned and licensed patent portfolio may notprovide us with sufficient rights to exclude others from commercializing products similar or identical to ours. For example, our in-licensed U.S. and Europeanpatents covering composition of matter and pharmaceutical compositions of roluperidone, respectively, are expected to expire as soon as 2021. In addition,our in-licensed U.S. and European patents relating to pharmaceutical compositions and uses of MIN-117 to treat depression are expected to expire as soonas 2020. Finally, any patent that grants from our U.S. patent applications relating to methods of using MIN-301 to treat neurologic and psychiatric diseases isexpected to expire as early as 2028. Although we expect to seek extensions of patent terms where available, including in the United States under the DrugPrice Competition and Patent Term Restoration Act of 1984, which permits a patent term extension of up to five years beyond the expiration of the patent, wecannot be certain that an extension will be granted, or if granted, what the applicable time period or the scope of patent protection afforded during anyextended period will be. The applicable authorities, including the EMA, FDA, and any equivalent regulatory authority in other countries, may not agree withour assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than werequest. If this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and pre-clinical data andlaunch their product earlier than might otherwise be the case.The expiration of composition of matter patent protection with respect to one or more of our product candidates may diminish our ability to maintain aproprietary position for our intended uses of a particular product candidate. Moreover, we cannot be certain that we will be the first applicant to obtain anFDA approval for any indication of one or more of our product candidates and we cannot be certain that it will be entitled to new chemical entity, or NCE,exclusivity. Such diminution of our proprietary position could have a material adverse effect on our business, results of operations and financial condition.We have in-licensed or acquired a portion of our intellectual property necessary to develop our product candidates, and if we fail to comply with ourobligations under any of these arrangements, we could lose such intellectual property rights.We are a party to and rely on several arrangements with third parties, which give us rights to intellectual property that is necessary for the development of ourproduct candidates. In addition, we may enter into similar arrangements in the future. Our current arrangements impose various development, royalty andother obligations on us. If we materially breach these obligations or if our counterparts fail to adequately perform their respective obligations, these exclusivearrangements could be terminated, which would result in our inability to develop, manufacture and sell products that are covered by such intellectualproperty.We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming andunsuccessful.Competitors may infringe our issued patents or other intellectual property. In some cases, it may be difficult or impossible to detect third-party infringementor misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even moredifficult. Accordingly, for such undetectable infringement or misappropriation our ability to recover damages will be negligible and we could be at a marketdisadvantage because we may lack the resources of some of our competitors to monitor for and detect infringement. To counter infringement or unauthorizeduse, we may be required to file infringement claims, which can be expensive and time consuming. Any claims we assert against perceived infringers couldprovoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in any patent infringement proceeding, a courtmay decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party fromusing the technology at issue on the grounds that our patents do not cover the technology. An adverse result in any litigation proceeding could put one ormore of our patents at risk of being invalidated or interpreted narrowly.We may need to license or acquire additional patents and intellectual property rights.One or more third parties may hold intellectual property rights, including patent rights, important or necessary to the development of our products. It may benecessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain alicense from these third parties on commercially reasonable terms. If we were not able to obtain a license, or were not able to obtain a license on commerciallyreasonable terms, our business could be harmed, possibly materially.Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain andcould harm our business.Our commercial success depends upon our ability to develop, manufacture, market and sell our products, and to use our related proprietary technologies. Wemay become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products,including interference or derivation proceedings before the U.S. Patent and47 Trademark Office, or the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in thefuture. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continuecommercializing our products. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Under certaincircumstances, we could be forced, including by court order, to cease commercializing our products. In addition, in any such proceeding or litigation, wecould be found liable for monetary damages. Regardless of the outcome, such claims or litigation may be time-consuming and costly to defend, divertmanagement resources and have other adverse effects on our business.Restrictions on our patent rights relating to our product candidates may limit our ability to prevent third parties from competing against us.Our success will depend, in part, on our ability to obtain and maintain patent protection for our product candidates, preserve our trade secrets, prevent thirdparties from infringing upon our proprietary rights and operate without infringing upon the proprietary rights of others. Composition-of-matter patents on thebiological or chemical active pharmaceutical ingredient are generally considered to be the strongest form of intellectual property protection forpharmaceutical products, as such patents provide protection without regard to any method of use. We have filed and in-licensed composition-of-matter patentapplications for all of our product candidates. However, we cannot be certain that the claims in our patent applications to inventions covering our productcandidates will be considered patentable by the USPTO and courts in the United States or by the patent offices and courts in foreign countries.In addition to composition-of-matter patents and patent applications, we also have filed method-of-use patent applications. This type of patent protects theuse of the product only for the specified method. However, this type of patent does not prevent a competitor from making and marketing a product that isidentical to our product for an indication that is outside the scope of the patented method. Moreover, even if these competitors do not actively promote theirproduct for our targeted indication, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to theinfringement of method-of-use patents, the practice is common and such infringement is difficult to prevent or prosecute.Patent applications in the United States and most other countries are confidential for a period of time until they are published, and publication of discoveriesin scientific or patent literature typically lags actual discoveries by several months or more. As a result, we cannot be certain that we and the inventors of theissued patents and applications that we may in-license were the first to conceive of the inventions covered by such patents and pending patent applicationsor that we and those inventors were the first to file patent applications covering such inventions. Also, we have a number of issued patents and numerouspatent applications pending before the USPTO and foreign patent offices and the patent protection may lapse before we manage to obtain commercial valuefrom them, which might result in increased competition and materially affect our position in the market.Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.Obtaining and enforcing patents in the biopharmaceutical industry involve technological and legal complexity, and obtaining and enforcingbiopharmaceutical patents is costly, time-consuming, and inherently uncertain. The United States Supreme Court has ruled on several patent cases in recentyears, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. Inaddition to increasing uncertainty with regard to our and our licensors’ or collaborators’ ability to obtain patents in the future, this combination of events hascreated uncertainty with respect to the value of patents, once obtained. Depending on decisions by the United States Congress, the federal courts, and theUSPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our and our licensors’ or collaborators’ ability toobtain new patents or to enforce existing and future patents.Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our and our licensors’ or collaborators’ patentapplications and the enforcement or defense of our or our licensors’ or collaborators’ issued patents. For example, the Leahy-Smith America Invents Act, orthe America Invents Act, includes provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The USPTOdeveloped new regulations and procedures to govern administration of the America Invents Act, and many of the substantive changes to patent lawassociated with the America Invents Act, and in particular, the first to file provisions, are now effective. While it is still not clear what, if any, impact theAmerica Invents Act will have on the operation of our business, the America Invents Act and its implementation could increase the uncertainties and costssurrounding the prosecution of our or our licensors’ or collaborators’ patent applications and the enforcement or defense of our or our licensors’ orcollaborators’ issued patents, all of which could have a material adverse effect on our business and financial condition.48 We may not be able to protect our intellectual property rights throughout the world.Filing, prosecuting and defending patents on all of our product candidates throughout the world would be prohibitively expensive. Competitors may use ourtechnologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringingproducts to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with ourproducts in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficientto prevent them from so competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systemsof certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularlythose relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products inviolation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert ourefforts and attention from other aspects of our business.Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with theserequirements.The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and otherprovisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application,resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier thanwould otherwise have been the case.Intellectual property rights do not necessarily address all potential threats to our competitive advantage.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may notadequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative: •Others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of the patents that weown or have exclusively licensed. •We or our licensors or strategic partners might not have been the first to make the inventions covered by the issued patents or pending patentapplications that we own or have exclusively licensed. •We or our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions. •Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectualproperty rights. •It is possible that our pending patent applications will not lead to issued patents. •Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid orunenforceable, as a result of legal challenges by our competitors. •Our competitors might conduct research and development activities in countries where we do not have patent rights and then use theinformation learned from such activities to develop competitive products for sale in our major commercial markets. •We may not develop additional proprietary technologies that are patentable. •The patents of others may have an adverse effect on our business.Should any of these events occur, they could significantly harm our business, results of operations and prospects.We may be subject to claims that we or our employees or consultants have wrongfully used or disclosed alleged trade secrets of our employees’ orconsultants’ former employers or their clients. These claims may be costly to defend and if we do not successfully do so, we may be required to paymonetary damages and may lose valuable intellectual property rights or personnel.Many of our employees and contractors were previously employed at universities or biotechnology or pharmaceutical companies, including our competitorsor potential competitors. Although no claims against us are currently pending, we may be subject to claims that these employees or we have inadvertently orotherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against theseclaims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss ofkey research personnel or their49 work product could hamper our ability to commercialize, or prevent us from commercializing our product candidates, which could severely harm ourbusiness. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets, including unpatented know-how, technologyand other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure andconfidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contractmanufacturers, consultants, advisors and other third parties. We also enter into invention and patent assignment agreements with our employees andconsultants that obligate them to assign their inventions to us. Despite these efforts, any of these parties may breach the agreements and disclose ourproprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a partyillegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courtsinside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained orindependently developed by a competitor, we would have no right to prevent them from using that technology or information to compete with us. If any ofour trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.Risks Related to Ownership of Our Common StockWe cannot predict what the market price of our common stock will be and, as a result, it may be difficult for you to sell your shares of our common stock.An inactive market may impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategicpartnerships or acquire companies or products by using our shares of common stock as consideration. We cannot predict the prices at which our commonstock will trade. It is possible that in one or more future periods our results of operations may be below the expectations of public market analysts andinvestors and, as a result of these and other factors, the price of our common stock may fall.The market price of our stock may be volatile, and you could lose all or part of your investment.The trading price of our common stock is likely to be highly volatile and subject to wide fluctuations in response to various factors, some of which we cannotcontrol. In addition to the factors discussed in this “Risk Factors” section these factors include: •the success of competitive products or technologies; •regulatory actions with respect to our products or our competitors’ products; •actual or anticipated changes in our growth rate relative to our competitors; •announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capitalcommitments; •results of clinical trials of our product candidates or those of our competitors; •developments or disputes concerning patent applications, issued patents or other proprietary rights; •the recruitment or departure of key personnel; •the results of our efforts to in-license or acquire additional product candidates or products; •actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; •variations in our financial results or those of companies that are perceived to be similar to us; •share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; •announcement or expectation of additional financing efforts; •sales of our common stock by us, our insiders or our other stockholders; •changes in the structure of healthcare payment systems, including coverage and reimbursement; •market conditions in the pharmaceutical and biotechnology sectors; and •general economic, industry and market conditions.50 Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject tostockholder approval.To our knowledge, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially own approximately47% of our voting stock as of December 31, 2018. Accordingly, these stockholders may be able to determine all matters requiring stockholder approval. Forexample, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale ofassets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you mayfeel are in your best interest as one of our stockholders. The interests of this group of stockholders may not always coincide with the interests of otherstockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premiumvalue for their common stock, and might affect the prevailing market price for our common stock.Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our existing stockholders sell, or if the marketperceives that our existing stockholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stockcould decline significantly.Our management will continue to have broad discretion over the use of the proceeds we received in our public offerings, private placements, warrantexercises and loans and might not apply the proceeds in ways that increase the value of your investment.Our management will continue to have broad discretion to use the net proceeds from our public offerings, private placements warrant exercises and loans andyou will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply our net proceeds inways that ultimately increase the value of your investment. Because of the number and variability of factors that will determine our use of the remaining netproceeds from our initial public offering, follow-on public offering and other financing transactions, their ultimate use may vary substantially from theircurrently intended use. If we do not invest or apply the net proceeds from our public offerings, private placements, warrant exercises and loans in ways thatenhance stockholder value, we may fail to achieve the expected financial results, which could cause our stock price to decline.Future sales and issuances of equity and debt securities could result in additional dilution to our stockholders and could place restrictions on ouroperations and assets, and such securities could have rights, preferences and privileges senior to those of our common stock.We expect that significant additional capital will be needed in the future to fund our planned operations, including to complete clinical trials for our productcandidates. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a mannerwe determine from time to time. If we sell common stock, convertible securities or other equity securities, existing stockholders may be materially diluted bysubsequent sales, and new investors could gain rights, preferences and privileges senior to the holders of our common stock.Pursuant to our Amended and Restated 2013 Equity Incentive Plan, our management is authorized to grant up to 9,031,333 stock options or awards to ouremployees, directors and consultants, and the number of shares of our common stock reserved for future issuance under the plan will be subject to automaticannual increases in accordance with the terms of the plan. To the extent that new options are granted and exercised or we issue additional shares of commonstock in the future, our stockholders may experience additional dilution, which could cause our stock price to fall.We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies willmake our common stock less attractive to investors.We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and may take advantage of certain exemptionsfrom various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required tocomply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensationin our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation andstockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years followingthe year in which we completed our initial public offering, although circumstances could cause us to lose that status earlier, including if the market value ofour common stock held by non-affiliates exceeds $700.0 million as of any June 30 before that time or if we have total annual gross revenue of $1.0 billion ormore during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31 or, if weissue more than $1.0 billion in non-convertible debt during any51 three year period before that time, we would cease to be an emerging growth company immediately. We cannot predict if investors will find our commonstock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less activetrading market for our common stock and our stock price may be more volatile.We incur increased costs and demands upon management as a result of being a public company.As a public company listed in the United States, we incur significant additional legal, accounting and other costs. We are subject to the reportingrequirements of the Exchange Act, which requires, among other things, that we file with the Securities and Exchange Commission, or the SEC, annual,quarterly and current reports with respect to our business and financial condition. In addition, changing laws, regulations and standards relating to corporategovernance and public disclosure, including regulations implemented by the SEC and The Nasdaq Stock Market, may increase legal and financialcompliance costs and make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result,their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We invest resources to comply withevolving laws, regulations and standards, and this investment results in increased general and administrative expenses and a diversion of management’s timeand attention. If we do not comply with new laws, regulations and standards, regulatory authorities may initiate legal proceedings against us and our businessmay be harmed.Failure to comply with these rules might also make it more difficult for us to obtain some types of insurance, including director and officer liability insurance,and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact ofthese events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board ofdirectors or as members of senior management.We may be subject to securities litigation, which is expensive and could divert management attention.The market price of our common stock may be volatile, and in the past, companies that have experienced volatility in the market price of their stock havebeen subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result insubstantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our managementand hinder efforts to acquire a controlling interest in us, and the market price of our common stock may be lower as a result.There are provisions in our certificate of incorporation and bylaws that may make it difficult for a third party to acquire, or attempt to acquire, control of ourcompany, even if a change in control was considered favorable by you and other stockholders. For example, our board of directors has the authority to issueup to 100,000,000 shares of preferred stock. The board of directors can fix the price, rights, preferences, privileges and restrictions of the preferred stockwithout any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As aresult, the market price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferredstock may result in the loss of voting control to other stockholders.Our charter documents also contain other provisions that could have an anti-takeover effect, including: •establishing a classified board of directors such that not all members of the board are elected at one time; •allowing the authorized number of directors to be changed only by resolution of our board of directors; •limiting the removal of directors by the stockholders; •authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued withoutstockholder approval; •prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; •eliminating the ability of stockholders to call a special meeting of stockholders; •establishing advance notice requirements for nominations for election to the board of directors or for proposing matters than can be acted uponat stockholder meetings; and •requiring the approval of the holders of at least 66 2/3% of the votes that all of our stockholders would be entitled to cast to amend or repealour bylaws.In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitionsby prohibiting Delaware corporations from engaging in specified business combinations with particular52 stockholders of those companies. These provisions could discourage potential acquisition proposals and could delay or prevent a change in controltransaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be inyour best interests. These provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.If securities or industry analysts cease publishing research or publish inaccurate or unfavorable research about our business, our stock price and tradingvolume could decline.The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.If one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price wouldlikely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease,which might cause our stock price and trading volume to decline.We have never paid dividends on our capital stock, and because we do not anticipate paying any cash dividends in the foreseeable future, capitalappreciation, if any, of our common stock will be your sole source of gain on an investment in our common stock.We have paid no cash dividends on any of our classes of capital stock to date, and we currently intend to retain our future earnings, if any, to fund thedevelopment and growth of our business. In addition, the terms of our credit facility limit our ability to pay cash dividends on our capital stock. We do notanticipate paying any cash dividends on our common stock in the foreseeable future. As a result, capital appreciation, if any, of our common stock will beyour sole source of gain for the foreseeable future. There is no guarantee that shares of our common stock will appreciate in value or even maintain the priceat which you purchase shares of our common stock. ITEM 1B.Unresolved Staff CommentsNone. ITEM 2.PropertiesOur principal executive offices are located at 1601 Trapelo Road, Suite 286, Waltham, Massachusetts 02451. We lease this facility, which consists ofapproximately 5,923 square feet of office space, and the term of our Sublease expires on July 27, 2021. We believe that our existing facility is sufficient forour current needs for the foreseeable future. ITEM 3.Legal ProceedingsFrom time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although the resultsof litigation and claims cannot be predicted with certainty, as of the date of this Form 10-K, we do not believe we are party to any claim or litigation, theoutcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on ourbusiness. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resourcesand other factors. ITEM 4.Mine Safety DisclosuresNot applicable.53 Part IIITEM 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock has been traded on the Nasdaq Global Market under the symbol “NERV” since our initial public offering on July 1, 2014.At March 7, 2019, there were approximately 140 holders of record of our common stock. We believe that the number of beneficial owners of our commonstock at that date was substantially greater.Our equity plan information required by this Item is incorporated by reference to the information in Part III, Item 12 of this Annual Report on Form 10-K.Recent Sales of Unregistered SecuritiesDuring the year ended December 31, 2018, we did not issue or sell any unregistered securities not previously disclosed in a Quarterly Report on Form 10-Q orin a Current Report on Form 8-K.Issuer Purchases of Equity SecuritiesWe did not repurchase any securities during the quarter ended December 31, 2018.ITEM 6.Selected Financial DataNot applicable.54 ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of OperationsMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSYou should read the following discussion and analysis of our financial condition and results of operations together with the financial statements andrelated notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information in this discussion and analysis contains forward-lookingstatements reflecting our current expectations and involves risk and uncertainties. For example, statements regarding our expectations as to our plans andstrategy for our business, future financial performance, expense levels and liquidity sources are forward-looking statements. Our actual results and thetiming of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth underthe “Risk Factors” section and elsewhere in this Annual Report on Form 10-K. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”OverviewWe are a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patientssuffering from central nervous system, or CNS, diseases. Leveraging our scientific insights and clinical experience, we have acquired or in-licensed fourdevelopment-stage proprietary compounds that we believe have innovative mechanisms of action and therapeutic profiles that potentially address the unmetneeds of patients with these diseases.Our product portfolio and potential indications include: roluperidone for the treatment of schizophrenia; seltorexant (also known as MIN-202 or JNJ-42847922), which we are co-developing with Janssen Pharmaceutica NV, or Janssen, for the treatment of insomnia disorder and Major Depressive Disorder, orMDD; MIN-117 for the treatment of MDD: and MIN-301 for the treatment of Parkinson’s disease. We believe our product candidates have significantpotential to improve the lives of a large number of affected patients and their families who are currently not well-served by available therapies.In November 2013, Cyrenaic Pharmaceuticals, Inc., or Cyrenaic, and Sonkei Pharmaceuticals, Inc., or Sonkei, merged, and the combined company wasrenamed Minerva Neurosciences, Inc. Cyrenaic had been incorporated in 2007 and had exclusively licensed roluperidone from Mitsubishi Tanabe PharmaCorporation, or MTPC. Sonkei had been incorporated in 2008 and had exclusively licensed MIN-117 from MTPC. We executed the merger as we saw anopportunity to better serve an underserved patient population through combining a portfolio of promising product candidates targeting CNS diseases. As aresult of the merger, we have the rights to develop and commercialize roluperidone 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 rightsto develop and commercialize MIN-301. In addition, in February 2014 we entered into a co-development and license agreement with Janssen, one of theJanssen Pharmaceutical Companies of Johnson & Johnson, for the co-development of seltorexant. We entered into an amendment to this agreement in June2017 that took effect on August 29, 2017. Under the amended agreement, we gained global strategic control of the development of seltorexant to treatinsomnia, and Janssen waived its right to royalties on seltorexant insomnia sales in the Minerva territory, which includes the European Union, Switzerland,Liechtenstein, Iceland and Norway (the “Minerva Territory”). We retain our rights to seltorexant as adjunctive therapy for MDD, which include an exclusivelicense in the Minerva Territory with royalties payable by us to Janssen, and royalties on sales payable by Janssen to Minerva elsewhere worldwide. (SeeSeltorexant – Amendment to Co-Development and License Agreement below.)We have not received regulatory approvals to commercialize any of our product candidates, and we have not generated any revenue from the sales or licenseof our product candidates. We have incurred significant operating losses since inception. We expect to incur net losses and negative cash flow from operatingactivities for the foreseeable future in connection with the clinical development and the potential regulatory approval, infrastructure development andcommercialization of our product candidates.Financial OverviewRevenueNone of our product candidates have been approved for commercialization and we have not received any revenue in connection with the sale or license ofour product candidates. As a result of the Amendment to our Co-Development and License Agreement with Janssen, we have Deferred Revenue that will berecognized in future periods, the timing of which is subject to certain future events that will be evaluated in conjunction with the relevant revenuerecognition pronouncements.55 Research and Development ExpensesResearch and development expenses consists of costs incurred in connection with the development of our product candidates, including: fees paid toconsultants and clinical research organizations, or CROs, including in connection with our non-clinical and clinical trials, and other related clinical trial fees,such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statisticalcompilation and analysis; licensing fees; costs related to acquiring clinical trial materials; costs related to compliance with regulatory requirements; andcosts related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and development functions. We expense researchand development costs as they are incurred.The historic direct costs relating to each of our product candidates are summarized as follows (in thousands): Year Ended December 31, 2018 (1) 2017 (1) Roluperidone $25,071 $12,177 MIN-117 7,081 4,182 Seltorexant(2) — 11,176 MIN-301 480 755 Total $32,632 $28,290 (1)The expense for the years ended December 31, 2018 and 2017 excludes non cash stock-based compensation expense of $2.257 million and$1.966 million, respectively. (2)The $11.2 million represents accrued and unpaid expenses incurred during 2017 under the collaboration agreement with Janssen. These accruedexpenses were forgiven upon the effective date of the Amendment to the Co-Development and License Agreement with Janssen, have no cashimpact on us and have been included under Deferred Revenue on our balance sheet at December 31, 2018 and 2017.In the future, we expect research and development expenses to be our largest category of operating expenses and to increase as we continue our planned pre-clinical and clinical trials for our product candidates and as we hire additional research and development staff.Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We anticipate we will makedeterminations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to the scientific and clinicalsuccess or failure of each product candidate, the estimated costs to continue the development program relative to our available resources, as well as anongoing assessment as to each product candidate’s commercial potential. We will need to raise additional capital or may seek additional productcollaborations in the future in order to complete the development and commercialization of our product candidates.We test goodwill and in-process research and development for impairment annually on November 30 or more frequently if changes in circumstances or theoccurrence of events suggest impairment exists. The test for impairment of in-process research and development requires us to make several estimates aboutfair value, most of which are based on projected future cash flows. Changes in these estimates may result in the recognition of an impairment loss in ourresults of operations. An impairment analysis is performed whenever events or changes in circumstances indicate that the carrying amount of any individualasset may not be recoverable. For example, if we or our counterparties fail to perform our respective obligations under an agreement, or if we lack sufficientfunding to develop our product candidates, an impairment may result. In addition, any significant change in market conditions, estimates or judgments usedto determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known.General and Administrative ExpensesGeneral and administrative expenses consist principally of costs for functions in executive, finance, legal, auditing and taxes. Our general and administrativeexpenses include salaries, bonuses, facility and information system costs and professional fees for auditing, accounting, consulting and legal services.General and administrative costs also include non-cash stock-based compensation expense as part of our compensation strategy to attract and retain qualifiedstaff.We expect to continue to incur general and administrative expenses related to operating as a publicly-traded company, including increased audit and legalfees, costs of compliance with securities, corporate governance and other regulations, investor relations56 expenses and higher insurance premiums. In addition, we expect to incur additional costs as we hire personnel and enhance our infrastructure to support theanticipated growth of our business.Foreign Exchange (Losses) GainsForeign exchange (losses) gains are comprised primarily of losses and gains of foreign currency transactions related to clinical trial expenses denominated inEuros. Since our current clinical trials are conducted in Europe, we incur certain expenses in Euros and record these expenses in United States Dollars at thetime the liability is incurred. Changes in the applicable foreign currency rate between the date an expense is recorded and the payment date is recorded as aforeign currency loss or gain. We expect to continue to incur future expenses denominated in Euros as certain of our planned clinical trials are expected to beconducted in Europe.Investment IncomeInvestment income consists of income earned on our cash equivalents and marketable securities.Interest ExpenseInterest expense consists of interest incurred under our current outstanding loan with Oxford Finance LLC, or Oxford, and Silicon Valley Bank, or SVB.During the years ended December 31, 2018 and 2017, interest expense was related primarily to our loan with Oxford and SVB.Net Operating Losses and Tax CarryforwardsAs of December 31, 2018, we had approximately $53.9 million of federal net operating loss carryforwards. These federal net operating loss carryforwards willbegin to expire at various dates beginning in 2027, if not utilized. As of December 31, 2018, we had approximately $48.3 million of state net operating losscarryforwards. During the year ended December 31, 2018, no state operating loss carryforwards had expired.On December 22, 2017, the President signed into law the tax legislation commonly known as the Tax Cuts and Jobs Act. As part of the legislation, netoperating losses created after December 31, 2017 will have an indefinite carryforward period. Additionally, these future net operating losses will be limited to80% of taxable income for any future period in which they might be used. The legislation does not alter the amount or ability to utilize net operating lossescreated prior to December 31, 2017. This legislative change regarding the carryforward period of net operating losses impacts our indefinite lived deferred tax liabilities related to our in-processresearch and development, or IPR&D intangibles. Prior to the change in tax law, our net operating losses could not be used to offset deferred tax liabilitiesresulting from taxable temporary differences with an indefinite life. After the legislative change, federal net operating loss incurred after December 31, 2017will have an indefinite life. As a result, our deductible temporary differences will reverse and create unlimited lived deferred tax assets which may beavailable to offset indefinite lived deferred tax liabilities. Accordingly, we have recognized a tax benefit for the period ending December 31, 2017 to reflectthis reversal pattern.The Internal Revenue Code, or IRC, limits the amounts of net operating loss carryforwards that a company may use in any one year in the event of certaincumulative changes in ownership over a three‑year period as described in Section 382 of the IRC. We have not performed a detailed analysis to determinewhether an ownership change occurred upon consummation of the merger between us and Sonkei or the acquisition of Mind‑NRG. However, as a result ofthese transactions, our initial public offering and the shares issued to Johnson & Johnson Innovation-JJDC Inc. and shareholders of Mind‑NRG as part of theprivate placements consummated concurrently with our initial public offering, it is likely that an ownership change would occur or has occurred. Such anownership change could also be triggered by subsequent sales of securities by us or our stockholders. Such a change in ownership would limit the utilizationof our net operating losses. As a result, we may not be able to take full advantage of these tax carryforwards for federal tax purposes.57 Results of OperationsComparison of the Years Ended December 31, 2018 and December 31, 2017 (in thousands): Year ended December 31, 2018 2017 Expenses Research and development $34,889 $30,256 General and administrative 16,841 10,914 Total expenses 51,730 41,170 Loss from operations (51,730) (41,170) Foreign exchange losses (5) (57)Investment income 1,674 942 Interest expense (110) (614)Loss before income taxes (50,171) (40,899)Benefit for income taxes — (9,376)Net loss $(50,171) $(31,523) Research and Development ExpensesTotal Research and development expenses were $34.9 million for the year ended December 31, 2018 compared to $30.3 million for the same period in 2017,an increase of $4.6 million. The increase in research and development expenses primarily reflects higher development expenses for the Phase 3 clinical trialof roluperidone and the Phase 2b clinical trial of MIN-117. These amounts were partially offset by lower development expenses for the seltorexant programdue to the Amendment to our Co-Development and License Agreement with Janssen.General and Administrative ExpensesTotal general and administrative expenses were $16.8 million for the year ended December 31, 2018 compared to $10.9 million for the same period in 2017,an increase of approximately $5.9 million. This increase in general and administrative expenses was primarily due to an increase in non-cash stock-basedcompensation expenses and salary costs from increased staffing to support our pre-commercial activities. Foreign Exchange LossesForeign exchange losses were $5 thousand for the year ended December 31, 2018 compared to a loss of $57 thousand for the same period in 2017, adecreased loss of $52 thousand. The loss was primarily due to clinical activities denominated in Euros.Investment IncomeInvestment income was $1.7 million for the year ended December 31, 2018 compared to $0.9 million for the same period in 2017, an increase of $0.8 million.The increase was due to investment income on cash equivalents and marketable securities.Interest ExpenseInterest expense was $0.1 million for the year ended December 31, 2018 compared to $0.6 million for the same period in 2017, a decrease of $0.5 million.The decrease was primarily due to repayment of principal in 2018.Benefit for Income TaxesBenefit for income taxes was zero and $9.4 million for the years ended December 31, 2018 and 2017, respectively. On December 22, 2017, the United Statesenacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Act”), resulting in significant modifications to existing law. In the yearended December 31, 2017, these tax reforms resulted in a benefit of $9.4 million related to future implications of indefinite lived deferred tax positions. 58 Liquidity and Capital ResourcesSources of LiquidityWe have incurred losses and cumulative negative cash flows from operations since our inception in April 2007 and, as of December 31, 2018, we had anaccumulated deficit of approximately $214.6 million. We anticipate that we will continue to incur net losses for the foreseeable future as we continue thedevelopment and potential commercialization of our product candidates and to support our operations as a public company. At December 31, 2018, we hadapproximately $88.1 million in cash, cash equivalents, restricted cash, and marketable securities. We believe that our existing cash, cash equivalents,restricted cash, and marketable securities will be sufficient to meet our cash commitments for at least the next 12 months after the date that the financialstatements are issued. The process of drug development can be costly and the timing and outcomes of clinical trials is uncertain. The assumptions uponwhich we have based our estimates are routinely evaluated and may be subject to change. The actual amount of our expenditures will vary depending upon anumber of factors including but not limited to the design, timing and duration of future clinical trials, the progress of our research and development programsand the level of financial resources available. We have the ability to adjust our operating plan spending levels based on the timing of future clinical trialswhich will be predicated upon adequate funding to complete the trials.Sources of FundsAmendment to Co-Development and License Agreement with JanssenOn August 29, 2017, the European Commission approved the Amendment to our Co-Development and License Agreement with Janssen under which Janssenmade an upfront payment to us of $30 million in August 2017 and agreed to make a $20 million payment at the start of a Phase 3 insomnia trial forseltorexant and a $20 million payment when 50% of the patients are enrolled in this trial. Janssen further agreed to waive the remaining payments due fromus until the completion of certain Phase 2b trials, including $11.2 million in previously accrued collaborative expenses. In connection with the Amendment,we also repurchased all of the approximately 3.9 million shares of our stock previously owned by Johnson & Johnson Innovation-JJDC Inc. at a per shareprice of $0.0001, for an aggregate purchase price of approximately $389.Public Offering of Common StockOn July 5, 2017, we closed a public offering of common stock, in which we issued and sold 5,750,000 shares of our common stock, including 750,000 sharessold pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a public offering price of $7.75, for aggregate gross proceedsto us of $44.6 million. All of the shares issued and sold in this public offering were registered under the Securities Act pursuant to a registration statement onForm S-3 (File No. 333-205764) and a related prospectus and prospectus supplement, in each case filed with the Securities and Exchange Commission. Weincurred $3.0 million in underwriting discounts and commissions and transaction costs, which will be included as a component of additional paid-in capital,resulting in net proceeds of approximately $41.6 million.Exercise of WarrantsIn March 2017, certain investors in our March 2015 private placement exercised their warrants and received an aggregate of 1,621,073 shares of our commonstock. We received gross proceeds of approximately $9.4 million from the exercise of these warrants.Uses of FundsTo date, we have not generated any revenue. We do not know when, or if, we will generate any revenue from sales of our products or royalty payments fromour collaboration with Janssen. We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of andcommercialize any of our product candidates. At the same time, we expect our expenses to increase in connection with our ongoing development activities,particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our product candidates. We also expect tocontinue to incur costs associated with operating as a public company. In addition, subject to obtaining regulatory approval of any of our product candidates,we expect to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution.Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of equityofferings, debt financings, government or other third‑party funding, commercialization, marketing and distribution arrangements and other collaborations,strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, theownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adverselyaffect the rights of our common59 stockholders. Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specificactions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through government or otherthird‑party funding, commercialization, marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements withthird parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grantlicenses on terms that may not be favorable to us. There can be no assurance that such additional funding, if available, can be obtained on terms acceptable tous. If we are unable to obtain additional financing, future operations would need to be scaled back or discontinued. We believe that our existing cash, cashequivalents, restricted cash, and marketable securities will be sufficient to meet our cash commitments for at least the next 12 months after the date that thefinancial statements are issued. The timing of future capital requirements depends upon many factors including the size and timing of future clinical trials,the timing and scope of any strategic partnering activity and the progress of other research and development activities.Under our $10.0 million Term A Loan (see Note 5), we have made principal repayments of approximately $10.0 million and made a final repayment of alloutstanding borrowings on August 1, 2018.Cash FlowsThe tables below set forth our significant sources and uses of cash for the periods set forth below. Year ended December 31, 2018 2017 (dollars in millions) Net cash (used in) provided by: Operating activities $(41.9) $3.1 Investing activities 69.5 (107.2)Financing activities (3.3) 47.2 Net increase (decrease) in cash $24.3 $(56.9) Net Cash (Used in) Provided by Operating ActivitiesNet cash used in operating activities of approximately $41.9 million during the year ended December 31, 2018 was primarily due to our net loss of $50.2million, an increase in prepaid expenses of $0.6 million and amortization of investments of $0.1 million, partially offset by stock-based compensationexpense of $8.2 million, an increase in accounts payable of $0.4 million and an increase in accrued expenses $0.4 million.Net cash provided by operating activities of approximately $3.1 million during the year ended December 31, 2017 was primarily due to a $41.2 millionincrease in deferred revenue related to the Amendment, stock-based compensation expense of $5.0 million, a $0.6 million increase in accrued expense andamortization of debt discount of $0.2 million, partially offset by our net loss of $31.5 million, a decrease of $9.4 million in deferred taxes, a decrease inaccrued collaborative expense of $2.5 million, and an increase in prepaid expenses of $0.3 million and amortization of investments of $0.2 million.Net Cash Provided by (Used in) Investing ActivitiesNet cash provided by investing activities of approximately $69.5 million during the year ended December 31, 2018 was primarily due to the maturity andredemption of marketable securities of $110.2 million, partially offset by the purchase of marketable securities of $40.7 million.Net cash used in investing activities of approximately $107.2 million during the year ended December 31, 2017 was primarily due to the purchase ofmarketable securities of $134.5 million and the purchase of equipment of $0.1 million, partially offset by the maturity and redemption of marketablesecurities of $27.4 million.Net Cash (Used In) Provided by Financing ActivitiesNet cash used in financing activities of $3.4 million during the year ended December 31, 2018 was due to principal repayments and payment of an end ofterm fee under the Term A Loans of $4.0 million, partially offset by the proceeds from the exercise of common stock options of $0.6 million.60 Net cash provided by financing activities of $47.2 million during the year ended December 31, 2017 was primarily due to gross proceeds from the July 2017public stock offering of $44.6 million less costs of $3.0 million, proceeds from the exercise of common stock warrants of $9.4 million, and proceeds from theexercise of common stock options of $1.1 million, partially offset by the principal repayments under the Term A Loans of $4.9 million.Off-Balance Sheet ArrangementsWe did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have preparedin accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to makeestimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of thefinancial statements, as well as the reported revenues and expenses during the reporting periods. We evaluate these estimates and judgments on an ongoingbasis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of whichform the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results maydiffer from these estimates under different assumptions or conditions.While our significant accounting policies are more fully described in Note 2 to our financial statements appearing elsewhere in this Form 10-K, we believethat the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.Stock-Based CompensationWe recognize compensation expenses relating to stock-based payment transactions in operating results using a fair-value measurement method, inaccordance with ASC 718 Compensation-Stock Compensation. ASC 718 requires all stock-based payments to employees, including grants of employee stockoptions, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. We determine thefair value of stock-based awards using the Black-Scholes option-pricing model which uses both historical and current market data to estimate fair value. Themethod incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield, expected forfeiture rate andexpected life of the options. The fair value of restricted stock units is equal to the closing price of our common stock on the date of grant.The most critical assumptions used in the Black Scholes option-pricing model are the expected life of options and the expected volatility. The expected lifeof options granted to employees is estimated using the “simplified” method as defined by the Securities and Exchange Commission’s Staff AccountingBulletin No. 107, Share-Based Payment. The expected life of options granted to non-employees is the contractual term of the option. The expected volatilityfor all options is determined by examining the historical volatilities for industry peer companies, as we did not have sufficient trading history for its commonstock.Grants to non-employees are accounted for in accordance with ASC 505-50 Equity — Based Payments to Non-Employees. The date of expense recognitionfor grants to non-employees is the earlier of the date at which a commitment for performance by the counterparty to earn the equity instrument is reached orthe date at which the counterparty’s performance is complete. We determine the fair value of stock-based awards granted to non-employees similar to the wayfair value of awards are determined for employees except that certain assumptions used in the Black-Scholes option-pricing model, such as expected life ofthe option, may be different and the fair value of each unvested award is adjusted at the end of each period for any change in fair value from the previousvaluation until the award vests.Research and Development CostsCosts incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technologyin our research and development projects as well as fees paid to consultants and various entities that perform certain research and testing on our behalf andcosts related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and development functions. We determine ourexpenses related to clinical studies based on our estimates of the services received and efforts expended pursuant to contracts with multiple researchinstitutions and contract research organizations that conduct and manage clinical studies on our behalf. The financial terms of these agreements are subject tonegotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as thesuccessful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period61 over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level ofeffort varies from our estimate, we adjust the accrual accordingly. The expenses for some trials may be recognized on a straight-line basis if the anticipatedcosts are expected to be incurred ratably during the period. Payments for these activities are based on the terms of the individual arrangements, which maydiffer from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid or accrued expenses.We make estimates of our accrued research and development expenses as of each balance sheet date in our financial statements based on facts andcircumstances known at that time. Although we do not expect that our estimates will be materially different from amounts actually incurred, ourunderstanding of status and timing of services performed relative to the actual status and timing of services performed may vary and may result in ourreporting amounts that are too high or too low for any particular period. There had been no material adjustments to our prior period estimates of accruedexpenses for clinical trials. However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as webecome aware of additional information about the status or conduct of our clinical trials.In-process Research and DevelopmentIn-process research and development, or IPR&D, assets represent capitalized incomplete research projects that we acquired through business combinations.Such assets are initially measured at their acquisition date fair values. The initial fair value of the research projects is recorded as intangible assets on thebalance sheet, rather than expensed, regardless of whether these assets have an alternative future use.The amounts capitalized are being accounted for as indefinite-lived intangible assets, subject to impairment testing, until completion or abandonment ofresearch and development efforts associated with the project. An IPR&D asset is considered abandoned when it ceases to be used (that is, research anddevelopment efforts associated with the asset have ceased, and there are no plans to sell or license the asset or derive defensive value from the asset). At thatpoint, the asset is considered to be disposed of and is written off. Upon successful completion of each project, we will make a determination about the thenremaining useful life of the intangible asset and begin amortization. We test our indefinite-lived intangibles, IPR&D assets, for impairment annually onNovember 30 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. In estimating the fairvalue of IPR&D, an income approach was used with a discounted cash flow analysis. Many assumptions and estimates are included in this analysis includingrevenue and expense projections, probability of success factors, expected product launch date and a weighted average cost of capital of 20.0%.Potential triggering events that could indicate whether an impairment to the IPR&D may have occurred include: clinical trial results where the compoundunder investigation did not meet pre‑established criteria or clinical endpoints, failure to obtain regulatory approval, the inability to fund future clinical trials,failure to obtain patent protection, adverse changes in the regulatory environment, the approval of competing therapies or compounds, adverse changes inapplicable laws or regulations and a variety of other circumstances. The impairment of IPR&D could have a material adverse impact on our financialcondition. In order to determine whether an impairment has occurred, management must evaluate the events and incorporate multiple assumptions including:costs associated with continuing the development program, competing therapies or compounds, potential market size, estimated future cash flows and otherfactors. When testing indefinite-lived intangibles for impairment, we may assess qualitative factors for our indefinite-lived intangibles to determine whetherit is more likely than not (that is, a likelihood of more than 50 percent) that the asset is impaired. Alternatively, we may bypass this qualitative assessment forsome or all of our indefinite-lived intangibles and perform the quantitative impairment test that compares the fair value of the indefinite-lived intangibleasset with the asset’s carrying amount. We test our IPR&D for impairment as of November 30. There was no impairment of IPR&D for the years endedDecember 31, 2018 or 2017.GoodwillWe test our goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing ourreporting unit’s carrying value to its fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business,adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If we determine that an impairment hasoccurred, we are required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination ismade. In evaluating the recoverability of the carrying value of goodwill, we must make assumptions regarding estimated future cash flows and other factors todetermine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and requirean adjustment to the recorded balances. We test our goodwill for impairment as of November 30. There was no impairment of goodwill for the years endedDecember 31, 2018 or 2017.62 Income TaxesDeferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and aremeasured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Uncertain tax positions are evaluatedand if appropriate, the amount of unrecognized tax benefits are recorded within deferred tax assets. Deferred tax assets are evaluated for realization based on amore-likely-than-not criterion in determining if a valuation allowance should be provided. Valuation allowances are established when necessary to reducedeferred tax assets to the amounts expected to be realized.We use a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to betaken, in a tax return. We have elected to treat interest and penalties, to the extent they arise, as a component of income taxes. There was no interest orpenalties related to income taxes for the years ended December 31, 2018 or 2017. Income tax years beginning in 2012 for federal and state purposes aregenerally subject to examination by taxing authorities, although net operating losses from all prior years are subject to examinations and adjustments for atleast three years following the year in which the tax attributes are utilized.JOBS ActOn April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerginggrowth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or theSecurities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certainaccounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extendedtransition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required fornon‑emerging growth public companies. We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirementsprovided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of theseexemptions, including without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant toSection 404(b) of the Sarbanes‑Oxley Act of 2002, as amended, and (ii) complying with any requirement that may be adopted by the Public CompanyAccounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about theaudit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) thelast day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversaryof the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during theprevious 3 years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.Recent Accounting PronouncementsFrom time to time, new accounting pronouncements are issued by FASB and are adopted by us as of the specified effective date. Unless otherwise disclosedin the notes to the financial statements appearing elsewhere in this Form 10-K, we believe that the impact of other recently issued, but not yet adopted,accounting pronouncements will not have a material impact on the financial position, results of operations or cash flows, or do not apply to our operations. ITEM 7A.Quantitative and Qualitative Disclosures about Market RiskNot applicable. 63 ITEM 8.Financial Statements and Supplementary Data Page Report of Independent Registered Public Accounting FirmF-1Consolidated Balance Sheets as of December 31, 2018 and 2017F-2Consolidated Statements of Operations for the Years Ended December 31, 2018 and 2017F-3Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2018 and 2017F-4Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017F-5Notes to Consolidated Financial StatementsF-6 64 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and the Board of Directors ofMinerva Neurosciences, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Minerva Neurosciences, Inc. and subsidiaries (the “Company”) as of December 31, 2018and 2017, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the two years in the period ended December 31,2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all materialrespects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the twoyears in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United Statesof America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal controlover financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purposeof expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPBoston, Massachusetts March 12, 2019 We have served as the Company’s auditor since 2013. F-1 MINERVA NEUROSCIENCES, INC.Consolidated Balance Sheets December 31, December 31, 2018 2017 Assets Current assets Cash and cash equivalents $50,234,871 $26,051,821 Marketable securities 37,762,439 102,109,419 Restricted cash 100,000 80,000 Prepaid expenses and other current assets 1,921,050 1,299,184 Total current assets 90,018,360 129,540,424 Marketable securities - noncurrent — 5,022,982 Equipment, net 33,478 50,945 Other noncurrent assets 14,808 14,808 In-process research and development 34,200,000 34,200,000 Goodwill 14,869,399 14,869,399 Total assets $139,136,045 $183,698,558 Liabilities and Stockholders’ Equity Current liabilities Notes payable - current portion $— $3,962,664 Accounts payable 1,799,666 1,435,636 Accrued expenses and other current liabilities 1,809,532 1,439,848 Total current liabilities 3,609,198 6,838,148 Deferred taxes 4,057,488 4,057,488 Deferred revenue 41,175,600 41,175,600 Other noncurrent liabilities 28,990 29,878 Total liabilities 48,871,276 52,101,114 Commitments and contingencies Stockholders’ equity Preferred stock; $.0001 par value; 100,000,000 shares authorized; none issued or outstanding as of December 31, 2018 and 2017, respectively — — Common stock; $.0001 par value; 125,000,000 shares authorized; 38,937,971 and 38,749,343 shares issued and outstanding as of December 31, 2018 and 2017, respectively 3,894 3,875 Additional paid-in capital 304,813,603 295,975,010 Accumulated deficit (214,552,728) (164,381,441)Total stockholders’ equity 90,264,769 131,597,444 Total liabilities and stockholders’ equity $139,136,045 $183,698,558 See accompanying notes to the consolidated financial statements. F-2 MINERVA NEUROSCIENCES, INC.Consolidated Statements of Operations Year Ended December 31, 2018 2017 Expenses Research and development $34,888,574 $30,255,892 General and administrative 16,841,308 10,914,269 Total expenses 51,729,882 41,170,161 Loss from operations (51,729,882) (41,170,161) Foreign exchange losses (4,847) (56,887)Investment income 1,673,890 941,833 Interest expense (110,448) (614,264)Loss before income taxes (50,171,287) (40,899,479)Benefit for income taxes — (9,376,272)Net loss $(50,171,287) $(31,523,207) Net loss per share, basic and diluted $(1.29) $(0.83)Weighted average shares outstanding, basic and diluted 38,792,581 37,937,191 See accompanying notes to the consolidated financial statements. F-3 MINERVA NEUROSCIENCES, INC.Consolidated Statements of Stockholders’ Equity Common Stock Additional Accumulated Shares Amount Paid-In Capital Deficit Total Balances at January 1, 2017 35,024,002 $3,502 $238,836,940 $(132,858,234) $105,982,208 Repurchase of common stock (3,892,256) (389) — — (389)Issuance of common stock in a public offering, net of issuance costs of $2,944,168 5,750,000 575 41,617,757 — 41,618,332 Exercise of common stock warrants 1,621,073 162 9,356,671 — 9,356,833 Exercise of stock options 197,874 20 1,130,524 — 1,130,544 Vesting of restricted stock units 48,650 5 (5) — — Stock-based compensation — — 5,033,123 — 5,033,123 Net loss — — — (31,523,207) (31,523,207)Balances at December 31, 2017 38,749,343 $3,875 $295,975,010 $(164,381,441) $131,597,444 Exercise of stock options 129,978 13 655,921 — 655,934 Vesting of restricted stock units 58,650 6 (6) — — Stock-based compensation — — 8,182,678 — 8,182,678 Net loss — — — (50,171,287) (50,171,287)Balances at December 31, 2018 38,937,971 $3,894 $304,813,603 $(214,552,728) $90,264,769 See accompanying notes to the consolidated financial statements. F-4 MINERVA NEUROSCIENCES, INC.Consolidated Statements of Cash Flows Year ended December 31, 2018 2017 Cash flows from operating activities: Net loss $(50,171,287) $(31,523,207)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 17,467 11,094 Amortization of debt discount recorded as interest expense 38,040 206,562 (Accretion) of marketable securities premium (119,614) (185,488)Stock-based compensation expense 8,182,678 5,033,123 Deferred taxes — (9,376,272)Changes in operating assets and liabilities Prepaid expenses and other current assets (621,866) (306,996)Accounts payable 364,030 (32,705)Accrued expenses and other current liabilities 369,684 624,035 Accrued collaborative expenses — (2,547,952)Deferred revenue — 41,175,600 Other noncurrent assets — (14,808)Other noncurrent liabilities (888) 29,878 Net cash (used in) provided by operating activities (41,941,756) 3,092,864 Cash flows from investing activities: Purchases of marketable securities (40,661,424) (134,525,859)Proceeds from the maturity and redemption of marketable securities 110,151,000 27,390,000 Purchases of equipment — (52,400)Net cash provided by (used in) investing activities 69,489,576 (107,188,259) Cash flows from financing activities: Proceeds from sale of common stock in public offering — 44,562,500 Costs paid in connection with public offering — (2,944,168)Repurchase of common stock — (389)Proceeds from exercise of common stock warrants — 9,356,833 Proceeds from exercise of stock options 655,934 1,130,544 Repayments of notes payable (4,000,704) (4,938,713)Net cash (used in) provided by financing activities (3,344,770) 47,166,607 Net increase (decrease) in cash and cash equivalents 24,203,050 (56,928,788) Cash, cash equivalents, and restricted cash Beginning of period 26,131,821 83,060,609 End of period $50,334,871 $26,131,821 Supplemental disclosure of cash flow information Cash paid for interest $92,916 $436,717 Reconciliation of the Condensed Consolidated Statements of Cash Flows to the Condensed Consolidated Balance Sheets Cash and cash equivalents $50,234,871 $26,051,821 Restricted cash $100,000 $80,000 Total cash, cash equivalents, and restricted cash $50,334,871 $26,131,821 See accompanying notes to the consolidated financial statements. F-5 MINERVA NEUROSCIENCES, INC.Notes To Consolidated Financial StatementsDecember 31, 2018 and 2017 NOTE 1 — NATURE OF OPERATIONS AND LIQUIDITYNature of OperationsMinerva Neurosciences, Inc. (“Minerva” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development andcommercialization of a portfolio of product candidates to treat patients suffering from central nervous system diseases. The Company has acquired or in-licensed four development-stage proprietary compounds that it believes have innovative mechanisms of action and therapeutic profiles that may potentiallyaddress the unmet needs of patients with these diseases. The Company’s lead product candidate is roluperidone (also known as MIN-101), a compound theCompany is developing for the treatment of schizophrenia. In addition, the Company’s portfolio includes seltorexant (also known as MIN-202 or JNJ-42847922), a compound the Company is co-developing with Janssen Pharmaceutica NV (“Janssen”) for the treatment of insomnia disorder and majordepressive disorder (“MDD”); MIN-117, a compound the Company is developing for the treatment of MDD; and MIN-301, a compound the Company isdeveloping for the treatment of Parkinson’s disease.In November 2013, the Company merged with Sonkei Pharmaceuticals Inc. (“Sonkei”), a clinical-stage biopharmaceutical company and, in February 2014,the Company acquired Mind-NRG, a pre-clinical-stage biopharmaceutical company. The Company refers to these transactions as the Sonkei Merger andMind-NRG Acquisition, respectively. The Company holds licenses to roluperidone and MIN-117 from Mitsubishi Tanabe Pharma Corporation (“MTPC”)with the rights to develop, sell and import roluperidone and MIN-117 globally, excluding most of Asia. With the acquisition of Mind-NRG, the Companyobtained exclusive rights to develop and commercialize MIN-301. The Company has also entered into a co-development and license agreement with Janssen,for the exclusive right to commercialize, and the co-exclusive right (with Janssen and its affiliates) to use and develop, seltorexant in the European Union,Switzerland, Liechtenstein, Iceland and Norway (the “Minerva Territory”), subject to certain royalty payments to Janssen, and royalty rights for any salesoutside the Minerva Territory.LiquidityThe accompanying financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization ofassets and satisfaction of liabilities in the normal course of business. The Company has limited capital resources and has incurred recurring operating lossesand negative cash flows from operations since inception. As of December 31, 2018, the Company has an accumulated deficit of approximately $214.6million and net cash used in operating activities was approximately $41.9 million during the year ended December 31, 2018. Management expects tocontinue to incur operating losses and negative cash flows from operations. The Company has financed its operations to date from proceeds from the sale ofcommon stock, warrants, loans and convertible promissory notes.As of December 31, 2018, the Company had cash, cash equivalents, restricted cash, and marketable securities of $88.1 million. The Company believes that itsexisting cash, cash equivalents, restricted cash, and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months afterthe date that the financial statements are issued. The process of drug development can be costly and the timing and outcomes of clinical trials is uncertain.The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change. The actual amount of theCompany’s expenditures will vary depending upon a number of factors including but not limited to the design, timing and duration of future clinical trials,the progress of the Company’s research and development programs, the infrastructure to support a commercial enterprise, the cost of a commercial productlaunch, and the level of financial resources available. The Company has the ability to adjust its operating plan spending levels based on the timing of futureclinical trials which will be predicated upon adequate funding to complete the trials. The Company will need to raise additional capital in order to continue to fund operations and fully fund later stage clinical development programs. TheCompany believes that it will be able to obtain additional working capital through equity financings or other arrangements to fund future operations;however, there can be no assurance that such additional financing, if available, can be obtained on terms acceptable to the Company. If the Company isunable to obtain such additional financing, future operations would need to be scaled back or discontinued.F-6 NOTE 2 — SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), andinclude all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. From its inception, the Company hasdevoted substantially all of its efforts to business planning, engaging regulatory, manufacturing and other technical consultants, planning and executingclinical trials and raising capital.ConsolidationThe accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries, Mind-NRG Sarl and MinervaNeurosciences Securities Corporation. Intercompany transactions have been eliminated.Significant risks and uncertaintiesThe Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are notlimited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market itsproducts, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, theCompany’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raisecapital.The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will besuccessfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review andapproval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and isdependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.Use of estimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses duringthe reporting period. Actual results could differ from those estimates.Cash and cash equivalentsCash equivalents include short-term, highly-liquid instruments, consisting of money market accounts and short-term investments with maturities from thedate of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Depositswith these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand whichreduces counterparty performance risk.Restricted cashCash accounts with any type of restriction are classified as restricted. The Company maintained restricted cash balances as collateral for corporate credit cardsin the amount of $100 thousand and $80 thousand at December 31, 2018 and 2017, respectively.F-7 Marketable securitiesMarketable securities consists of corporate and U.S. government debt securities maturing in nine months or less. Based on the Company’s intentionsregarding its marketable securities, all marketable securities are classified as held-to-maturity and are carried under the amortized cost approach. TheCompany’s investments in marketable securities are classified as Level 2 within the fair value hierarchy. As of December 31, 2018, remaining final maturitiesof marketable securities ranged from January 2019 to September 2019, with a weighted average remaining maturity of approximately 4.91 months. Thefollowing table provides the amortized cost basis, aggregate fair value, net unrealized (gains)/losses and the net carrying value of investments in held-to-maturity securities as of December 31, 2018 and 2017: December 31, 2018 Amortized Aggregate Unrealized Unrealized Net Carrying Cost Fair Value Gains Losses Value Marketable securities: Corporate bonds/notes$16,054,071 $16,050,462 $3,609 $— $16,054,071 Commercial paper 17,756,394 17,756,394 — — 17,756,394 U.S. government agency securities 3,951,974 3,951,040 934 — 3,951,974 Marketable securities total$37,762,439 $37,757,896 $4,543 $— $37,762,439 December 31, 2017 Amortized Aggregate Unrealized Unrealized Net Carrying Cost Fair Value Gains Losses Value Marketable securities current: Corporate bonds/notes$43,528,246 $43,438,463 $89,783 $— $43,528,246 Commercial paper 43,385,762 43,385,762 — — 43,385,762 U.S. government agency securities 15,195,411 15,178,278 17,133 — 15,195,411 Marketable securities current total 102,109,419 102,002,503 106,916 — 102,109,419 Marketable securities non-current: Corporate bonds/notes 5,022,982 4,998,870 24,112 — 5,022,982 Commercial paper — — — — — U.S. government agency securities — — — — — Marketable securities non-current total 5,022,982 4,998,870 24,112 — 5,022,982 Marketable securities total$107,132,401 $107,001,373 $131,028 $— $107,132,401 Research and development costsCosts incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technologyin the Company’s research and development projects as well as fees paid to consultants and various entities that perform certain research and testing onbehalf of the Company and costs related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and developmentfunctions. The Company determines expenses related to clinical studies based on estimates of the services received and efforts expended pursuant tocontracts with multiple research institutions and contract research organizations that conduct and manage clinical studies on its behalf. The financial terms ofthese agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contractsdepend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Companyestimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performanceof services or the level of effort varies from the estimate, the accrual is adjusted accordingly. The expenses for some trials may be recognized on a straight-linebasis if the anticipated costs are expected to be incurred ratably during the period. Payments for these activities are based on the terms of the individualarrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued expenses. In-process research and developmentIn-process research and development (“IPR&D”) assets represent capitalized incomplete research projects that the Company acquired through businesscombinations. Such assets are initially measured at their acquisition date fair values. The initial fair value of the research projects are recorded as intangibleassets on the balance sheet, rather than expensed, regardless of whether these assets have an alternative future use.F-8 The amounts capitalized are being accounted for as indefinite-lived intangible assets, subject to impairment testing, until completion or abandonment ofresearch and development efforts associated with the project. An IPR&D asset is considered abandoned when it ceases to be used (that is, research anddevelopment efforts associated with the asset have ceased, and there are no plans to sell or license the asset or derive defensive value from the asset). At thatpoint, the asset is considered to be disposed of and is written off. Upon successful completion of each project, the Company will make a determination aboutthe then remaining useful life of the intangible asset and begin amortization. The Company tests its indefinite-lived intangibles, IPR&D assets, forimpairment annually on November 30 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset isimpaired. When testing indefinite-lived intangibles for impairment, the Company may assess qualitative factors for its indefinite-lived intangibles todetermine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the asset is impaired. Alternatively, the Company may bypassthis qualitative assessment for some or all of its indefinite-lived intangibles and perform the quantitative impairment test that compares the fair value of theindefinite-lived intangible asset with the asset’s carrying amount. There was no impairment of IPR&D for the years ended December 31, 2018 or 2017.Stock-based compensationThe Company recognizes compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, including grants of employee stock options, to be recognized in operating results as compensation expense based on fair valueover the requisite service period of the awards. The Company determines the fair value of stock-based awards using the Black-Scholes option-pricing modelwhich uses both historical and current market data to estimate fair value. The method incorporates various assumptions such as the risk-free interest rate,expected volatility, expected dividend yield, expected forfeiture rate and expected life of the options. The fair value of restricted stock units (“RSUs”) isequal to the closing price of the Company’s common stock on the date of grant.The date of expense recognition for grants to non-employees is the earlier of the date at which a commitment for performance by the counterparty to earn theequity instrument is reached or the date at which the counterparty’s performance is complete. The Company determines the fair value of stock-based awardsgranted to non-employees similar to the way fair value of awards are determined for employees except that certain assumptions used in the Black-Scholesoption-pricing model, such as expected life of the option, may be different and the fair value of each unvested award is adjusted at the end of each period forany change in fair value from the previous valuation until the award vests.Foreign currency transactionsThe Company’s functional currency is the U.S. dollar. The Company pays certain vendor invoices in the respective foreign currency. The Company recordsan expense in United States Dollars at the time the liability is incurred. Changes in the applicable foreign currency rate between the date an expense isrecorded and the payment date is recorded as a foreign currency gain or loss.Loss per shareBasic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted loss pershare reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock orresulted in the issuance of common stock that shared in the earnings of the entity. The treasury stock method is used to determine the dilutive effect of theCompany’s stock options and warrants. The Company had a net loss in all periods presented thus the inclusion of stock options and warrants would be anti-dilutive to net loss per share.Income taxesDeferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and aremeasured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Uncertain tax positions are evaluatedand if appropriate, the amount of unrecognized tax benefits are recorded within deferred tax assets. Deferred tax assets are evaluated for realization based on amore-likely-than-not criterion in determining if a valuation allowance should be provided. Valuation allowances are established when necessary to reducedeferred tax assets to the amounts expected to be realized.The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, orexpected to be taken, in a tax return. The Company has elected to treat interest and penalties, to the extent they arise, as a component of income tax expense.There was no interest or penalties related to income taxes for the years ended December 31, 2018 or 2017. Income tax years beginning in 2012 for federal andstate purposes are generally subject to examination by taxing authorities, although net operating losses from all prior years are subject to examinations andadjustments for at least three years following the year in which the tax attributes are utilized.F-9 On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Act”), resulting in significantmodifications to existing law. The Company completed the accounting for the effects of the Act during 2017. The Company’s financial statements for theyear ended December 31, 2017, reflected the effects of the Act which included a reduction in the corporate tax rate from 34% to 21%. Accordingly, theCompany’s deferred tax assets and liabilities were revalued at the enacted rates effective in 2018 and in future years; the reduction in federal rate from 34% to21% resulted in no impact to total income tax expense. In addition to the federal rate change impact, the Company accounted for the impact of legislation onthe timing of deferred tax positions and overall financial statement presentation, resulting in a total income tax benefit of $9.4 million related to futureimplications of indefinite lived deferred tax positions in 2017. As the accounting for the effects was complete during 2017, no further changes impacted taxpositions during the period ending December 31, 2018.Concentration of credit riskFinancial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents and marketable securities.The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts, the balances of which,at times, may exceed federally insured limits. Exposure to cash and cash equivalents credit risk is reduced by placing such deposits with major financialinstitutions and monitoring their credit ratings. Marketable securities consist primarily of corporate bonds, with fixed interest rates. Exposure to credit risk ofmarketable securities is reduced by maintaining a diverse portfolio and monitoring their credit ratings.EquipmentEquipment is stated at cost less accumulated depreciation. Equipment is depreciated on the straight-line basis over their estimated useful lives of three years.Expenditures for maintenance and repairs are charged to expense as incurred.Long-lived assetsThe Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate thatthe carrying amount of a long-lived asset might not be recoverable. If required, the Company compares the estimated undiscounted future net cash flows tothe related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value,which is based either on discounted cash flows or appraised values in the period the impairment becomes known. The Company believes that all long-livedassets are recoverable, and no impairment was deemed necessary at December 31, 2018 and 2017.GoodwillThe Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, bycomparing its reporting unit’s carrying value to its fair value. Impairment may result from, among other things, deterioration in the performance of theacquired business, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Companydetermines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense inthe period the determination is made. In evaluating the recoverability of the carrying value of goodwill, the Company must make assumptions regardingestimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantlyimpact those judgments in the future and require an adjustment to the recorded balances. The Company tested its goodwill for impairment as ofNovember 30. There was no impairment of goodwill for the years ended December 31, 2018 or 2017.Fair value of financial instrumentsThe Company provides disclosure of financial assets and financial liabilities that are carried at fair value based on the price that would be received upon saleof an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements may beclassified based on the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities using the following three levels:Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at themeasurement date.Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in marketsthat are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derivedprincipally from or corroborated by observable market data by correlation or other means (market corroborated inputs).F-10 Level 3 — Unobservable inputs that reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability.The Company develops these inputs based on the best information available, including its own data.The following tables present information about the Company’s cash equivalents and marketable securities (current and non-current) as of December 31, 2018and 2017, measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determinesuch fair value: December 31, 2018 Total Level 1 Level 2 Level 3 Cash equivalents$42,575,645 $36,600,836 $5,974,809 $— Marketable securities 37,757,896 — 37,757,896 — Total fair value$80,333,541 $36,600,836 $43,732,705 $— December 31, 2017 Total Level 1 Level 2 Level 3 Cash equivalents$22,782,626 $22,782,626 $— $— Marketable securities 107,132,401 — 107,132,401 — Total fair value$129,915,027 $22,782,626 $107,132,401 $— Cash equivalents include short-term, highly-liquid instruments, consisting of money market accounts and short-term investments with maturities from thedate of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Depositswith these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand whichreduces counterparty performance risk. Marketable securities consists of corporate and U.S. government debt securities maturing in nine months or less. Based on the Company’s intentionsregarding its marketable securities, all marketable securities are classified as held-to-maturity and are carried under the amortized cost approach. Marketablesecurities are valued using models or other valuation methodologies that use Level 2 inputs. These models are primarily industry-standard models thatconsider various assumptions, including time value, yield curve, volatility factors, default rates, current market and contractual prices for the underlyingfinancial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derivedfrom observable data or are supported by observable levels at which transactions are executed in the marketplace. The carrying amounts of cash, restricted cash, accounts payable, and accrued liabilities approximate fair value because of their short-term nature. TheCompany believes that the Company’s debt obligations accrue interest at rates which approximate prevailing market rates for instruments with similarcharacteristics and, accordingly, the carrying values for these instruments approximate fair value.Revenue recognitionThe Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting StandardsCodification (“ASC”) 606, Revenue from Contracts with Customer’s. Revenue is recognized when persuasive evidence of an arrangement exists, delivery hasoccurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured. The Company is a development stage company andhas had no revenues from product sales to date.When the Company enters into an arrangement that meets the definition of a collaboration under ASC 808, Collaborative Arrangements, the Companyrecognizes revenue as research and development is performed and its respective share of the expenses are incurred. The Company assesses whether thearrangement contains multiple elements or deliverables, which may include (1) licenses to the Company's technology, (2) research and developmentactivities performed for the collaboration partner, and (3) participation on Joint Steering Committees. Payments may include non-refundable, upfrontpayments, milestone payments upon achieving significant development events, and royalties on future sales. Each required deliverable is evaluated todetermine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’sconsideration is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of eachdeliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of sellingprice; and (iii) best estimate of selling price. The best estimate of selling price reflects the Company’s best estimate of what the selling price would be if thedeliverable was regularly sold by the Company on a stand-alone basis. The consideration allocated to each unit of accounting is then recognized as therelated goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Supply or service transactions mayinvolve the charge of a nonrefundable initial fee with subsequent periodic payments for future products or services. The up-front fees, even if nonrefundable,are recognized as revenue as the products and/or services are delivered and performed over the term of the arrangement.F-11 Deferred revenueThe Company applies the revenue recognition guidance in accordance with ASC 606, Revenue from Contracts with Customer’s. Using ASC 606, revenuethat is unearned is deferred. Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is classified aslong-term deferred revenue.Segment informationOperating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) about which discretefinancial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessingperformance. The Company’s chief decision maker, who is the Chief Executive Officer, reviews operating results to make decisions about allocatingresources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment.Comprehensive lossThe Company had no items of comprehensive loss other than its net loss for each period presented.Recent accounting pronouncementsFrom time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and are adopted by the Company asof the specified effective date.Recently Adopted Accounting PronouncementsIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Subsequently, the FASB alsoissued No. ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which adjusted the effective date of ASU No. 2014-09; ASU No. 2016-08,Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends theprincipal-versus-agent implementation guidance and illustrations in ASU No. 2014-09; ASU No. 2016-10, Revenue from Contracts with Customers (Topic606): Identifying Performance Obligations and Licensing, which clarifies identifying performance obligation and licensing implementation guidance andillustrations in ASU No. 2014-09; and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and PracticalExpedients, which addresses implementation issues and is intended to reduce the cost and complexity of applying the new revenue standard in ASU No.2014-09 (collectively, the “Revenue ASUs”).The Revenue ASUs provide an accounting standard for a single comprehensive model for use in accounting for revenue arising from contracts with customersand supersedes most current revenue recognition guidance. The accounting standard is effective for interim and annual periods beginning after December 15,2017. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (the full retrospective method), orretrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method).The Company performed a detailed review of its collaboration agreements and assessed the differences in accounting for such contracts under this guidancecompared with current revenue accounting standards. The Company adopted the new standard on January 1, 2018 using the modified retrospective method.The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments (Topic 230).The new standard clarifies the treatment of several cash flow categories. In addition, ASU No. 2016-15 clarifies that when cash receipts and cash paymentshave aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update iseffective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted the new standard onJanuary 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows- Restricted Cash (Topic 230). The new standard requires an entity toinclude amounts described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period andend-of-period total amounts shown on the statement of cash flows. The Company adopted the new standard on January 1, 2018. The adoption of this standarddid not have a material impact on the Company’s consolidated financial statements. Cash, cash equivalents, and restricted cash reported on the ConsolidatedStatements of Cash Flows includes restricted cash of $100 thousand as of December 31, 2018 and $80 thousand as of December 31, 2017, respectively.F-12 Accounting Pronouncements Not Yet AdoptedIn February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record aROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating,with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning afterDecember 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital andoperating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practicalexpedients available. Although the Company is currently assessing the impact of adoption of ASU No. 2016-02 on its consolidated financial statements, theCompany currently believes the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on the Company’sbalance sheet for operating leases. Refer to Note 10, Commitments and Contingencies, for the Company’s current lease commitments.In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350). The new standard simplifies the test for goodwillimpairment. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years, with early adoptionpermitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on theCompany’s consolidated financial statements.In March 2017, the FASB issued ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization onPurchased Callable Debt Securities. The new standard is intended to enhance the accounting for the amortization of premiums for purchased callable debtsecurities. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoptionpermitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on theCompany’s consolidated financial statements.In June 2018, the FASB issued ASU No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Thenew standard is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. This update expandsthe scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-basedpayments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will besubstantially aligned. The new standard supersedes Subtopic 505-50, Equity-Equity-Based payments to Non-Employees. The update is effective for theCompany for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlierthan a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company adopted the new standard on January 1, 2019, which isnot expected to have a material impact on the Consolidated Balance Sheets or Statements of Operations.NOTE 3 — ACCRUED EXPENSES AND OTHER LIABILITIESAccrued expenses and other liabilities consist of the following: December 31, 2018 December 31, 2017 Research and development costs and other accrued expenses $1,353,987 $1,162,441 Professional fees 455,545 251,000 Interest payable — 20,508 Accrued bonus — 5,899 $1,809,532 $1,439,848 NOTE 4 — NET LOSS PER SHARE OF COMMON STOCKDiluted loss per share is the same as basic loss per share for all periods presented as the effects of potentially dilutive items were anti-dilutive given theCompany’s net loss. Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding.F-13 The following table sets forth the computation of basic and diluted loss per share for common stockholders: Year Ended December 31, 2018 2017 Net loss $(50,171,287) $(31,523,207)Weighted average shares of common stock outstanding 38,792,581 37,937,191 Net loss per share of common stock – basic and diluted $(1.29) $(0.83) The following securities outstanding at December 31, 2018 and 2017 have been excluded from the calculation of weighted average shares outstanding astheir effect on the calculation of loss per share is antidilutive: December 31, 2018 December 31, 2017 Common stock options 8,498,047 6,132,650 Restricted stock units 127,300 185,950 Common stock warrants 40,790 40,790 NOTE 5 — DEBTLoan and security agreementOn January 16, 2015, the Company entered into a Loan and Security Agreement (as amended, the “Loan Agreement”) with Oxford Finance LLC (“Oxford”)and Silicon Valley Bank (“SVB” and, together with Oxford, the “Lenders”), providing for term loans to the Company in an aggregate principal amount of upto $15 million, in two tranches (the “Term Loans”).The Company drew down the initial Term Loans in the aggregate principal amount of $10 million (the “Term A Loans”), on January 16, 2015. The Term ALoans bore interest at a fixed rate of 7.05% per annum. The Company believes that the Company's debt obligations accrued interest at rates whichapproximated prevailing market rates for instruments with similar characteristics and, accordingly, the carrying values for these instruments approximated fairvalue.The Company paid a facility fee at the time of borrowing of $75 thousand for access to the Term Loans and paid a final payment of $510 thousand in August2018, representing 5.1% of the total amount borrowed, which has been included as a component of the debt discount and was amortized to interest expenseover the term of the loans. The Term Loans matured on August 1, 2018 and the Company made a final repayment in the amount of $510 thousand on suchdate. As of December 31, 2018, the Company had no borrowings outstanding under the Term Loans. For the year ended December 31, 2018, and 2017, the Company recognized interest expense of $0.1 million and $0.6 million, respectively, including $38thousand and $0.2 million, respectively, related to the debt discount. NOTE 6 — CO-DEVELOPMENT AND LICENSE AGREEMENT On February 13, 2014, the Company signed a co-development and license agreement (the “Agreement”) with Janssen, which became effective uponcompletion of the Company’s initial public offering and provided for the payment of a $22.0 million license fee by the Company. Under the Agreement,Janssen, the licensor, granted the Company an exclusive license, with the right to sublicense, in the Minerva Territory, under (i) certain patent and patentapplications to sell products containing any orexin 2 compound, controlled by the licensor and claimed in a licensor patent right as an active ingredient, and(ii) seltorexant for any use in humans. In addition, upon regulatory approval in the Minerva Territory (and earlier if certain default events occur), theCompany will have rights to manufacture seltorexant, also known as JNJ-42847922. The Company has granted to the licensor an exclusive license, with theright to sublicense, under all patent rights and know-how controlled by the Company related to seltorexant to sell seltorexant outside the Minerva Territory.In consideration of the licenses granted on July 7, 2014, the Company made a license fee payment of $22.0 million, which was included as a component ofresearch and development expense in 2014.The Company accounts for the Agreement as a joint risk-sharing collaboration in accordance with ASC 808, “Collaborative Arrangements”. Paymentsbetween the Company and the licensor with respect to each party’s share of seltorexant development costs that have been incurred pursuant to the jointdevelopment plan are recorded within research and development expenses or general and administrative expenses, as applicable, in the accompanyingconsolidated statements of operations due to the joint risk-sharing nature of the activities.F-14 On July 6, 2016, the Company and Janssen agreed that “Decision Point 2” had been reached as defined under the Agreement. As neither party exercised theirright to withdraw from the Agreement, the Company paid Janssen $3.5 million and has incurred direct expenses of $0.3 million related to developmentactivities under the current phase of development. During the 12 months ended December 31, 2018 and 2017, the Company recorded expenses of zero and$11.2 million, respectively, for certain development activities in accordance with the terms of the Agreement. In June 2017, the Company entered into an amendment (“the Amendment”) to the co-development and license agreement with Janssen dated February 13,2014 (the “Agreement”). The effectiveness of the Amendment was contingent upon approval of its terms by the European Commission and the closing of theacquisition of Actelion Ltd. by affiliates of Janssen. These conditions were subsequently met, and the Amendment became effective on August 29, 2017.Under Amendment, Janssen has waived its right to royalties on seltorexant insomnia sales in the Minerva Territory. The Company retains all of its rights toseltorexant, including commercialization of the molecule for the treatment of insomnia and as an adjunctive therapy for MDD, which include an exclusivelicense in the Minerva Territory, with royalties payable by the Company to Janssen on seltorexant sales outside of the insomnia indication. Royalties onsales outside of the Minerva Territory are payable by Janssen to the Company. Janssen made an upfront payment to the Company of $30 million upon theeffectiveness of the Amendment and agreed to make a $20 million payment at the start of a Phase 3 insomnia trial for seltorexant and a $20 million paymentwhen 50% of the patients are enrolled in this trial. Janssen further agreed to waive development payments from the Company until completion of the Phase2b development milestone. This milestone is referred to as “Decision Point 4” and is expected to occur in the second half of 2019. The $30 million paymentand $11.2 million in previously accrued collaborative expenses, which were forgiven upon the effective date of the Amendment, are earned and recognizedas revenue as the services are performed from the commencement of Phase 3 development to the completion of the development activities using theproportional performance method. The $30 million payment along with the $11.2 million in previously accrued collaborative expenses have been includedunder deferred revenue on the Company’s balance sheet at December 31, 2018 and December 31, 2017. In connection with the Amendment, the Companyrepurchased all of the approximately 3.9 million shares of its common stock previously owned by Johnson & Johnson Innovation-JJDC Inc. at a per shareprice of $0.0001, for an aggregate purchase price of approximately $389.As a result of the Amendment, the Company assumed strategic control of matters relating to the clinical development of seltorexant for insomnia and has nofurther financial obligations until after Decision Point 4. After Decision Point 4, both the Company and Janssen have the right to opt-out of the Agreement.If the Company opts-out, it collects a royalty on worldwide sales of seltorexant in the single digits with no further obligations to Janssen. If Janssen opts-out,the Minerva Territory would be expanded to include North America and the Company would pay Janssen royalties on sales of seltorexant outside of theinsomnia indication in the single digits.If both parties elect to continue past Decision Point 4 into Phase 3, the Company would be obligated to fund the clinical trials related to insomnia, receive upto $40 million in milestone payments from Janssen, and be responsible for 40% of all costs incurred in the Phase 3 MDD program.The Company determined that the license under the Amendment is not considered to be a separate deliverable as it contains no value without thedevelopment activities performed under the Agreement. The participation in the joint steering committee under the Amendment is considered to be notseparable from the development activities and therefore the two deliverables are combined into a single unit of account. The Company concluded that themilestone payments are related to future performance obligations and will be recognized as those performance obligations are performed by the Company.Similarly, the Company will recognize royalty revenues in the periods of the sale of the related products, provided that no future performance obligationsexists and revenue recognition is limited to amounts for which it is probable that a significant reversal will not occur. NOTE 7 — STOCKHOLDERS’ EQUITYPublic Offering of Common StockOn July 5, 2017, the Company closed a public offering of its common stock, in which the Company issued and sold 5,750,000 shares of its common stock,including 750,000 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a public offering price of $7.75, foraggregate gross proceeds to the Company of $44.6 million. All of the shares issued and sold in this public offering were registered under the Securities Actpursuant to a registration statement on Form S-3 (File No. 333-205764) and a related prospectus and prospectus supplement, in each case filed with theSecurities and Exchange Commission. The Company incurred $3.0 million in underwriting discounts and commissions and transaction costs, which will beincluded as a component of additional paid-in capital, resulting in net proceeds of approximately $41.6 million.F-15 Share RepurchaseIn August 2017, in connection with the Amendment (see Note 6), the Company repurchased all of the approximately 3.9 million shares of its common stockpreviously owned by Johnson & Johnson Innovation-JJDC Inc. at a per share price of $0.0001, for an aggregate purchase price of approximately $389. Warrants ExercisesIn March 2017, certain investors in the Company’s March 2015 private placement exercised their warrants at an exercise price of $5.772 per share andreceived an aggregate of 1,621,073 shares of the Company’s common stock. The Company received gross proceeds of approximately $9.4 million from theexercise of these warrants. As of December 31, 2018, there are no remaining warrants outstanding under the Company’s March 2015 private placement.Term Loan Warrants In connection with the Loan Agreement, the Company issued the Lenders warrants to purchase shares of its common stock upon its draw of each tranche ofthe Term Loans (see Note 5). The aggregate number of shares of common stock issuable upon exercise of the warrants is equal to 2.25% of the amount drawnof such tranche, divided by the average closing price per share of the Company’s common stock reported on the Nasdaq Global Market for the 10 consecutivetrading days prior to the applicable draw. Upon the draw of the Term A Loans, the Company issued the Lenders warrants to purchase 40,790 shares ofcommon stock at a per share exercise price of $5.516. The warrants are immediately exercisable upon issuance, and other than in connection with certainmergers or acquisitions, will expire on the ten-year anniversary of the date of issuance. The fair value of the warrants was estimated at $0.2 million using aBlack-Scholes model and assuming: (i) expected volatility of 100.8%, (ii) risk free interest rate of 1.83%, (iii) an expected life of 10 years and (iv) nodividend payments. The fair value of the warrants was included as a discount to the Term A Loans and also as a component of additional paid-in capital andwill be amortized to interest expense over the term of the loan. All such warrants were outstanding as of December 31, 2018. NOTE 8 — STOCK AWARD PLAN AND STOCK-BASED COMPENSATIONIn December 2013, the Company adopted the 2013 Equity Incentive Plan (as subsequently amended and restated, the “Plan”), which provides for theissuance of options, stock appreciation rights, stock awards and stock units. On January 1, 2018, in accordance with the terms of the Plan, the total sharesauthorized for issuance under the plan increased by 750,000 to 6,531,333. This increase represents the lesser of 750,000 shares or 4% of the total sharesoutstanding calculated as of the end of the most recent fiscal year. In December 2017, the Company, issued inducement awards in the form of an option topurchase 775,000 shares of the Company’s common stock with an exercise price of $6.05 per share and restricted stock unit award to acquire 40,000 shares ofthe Company’s common stock, to Rick Russell in connection with his appointment as the Company’s President. These inducement awards are outside of, butsubject to the terms generally consistent with, the Company’s 2013 Equity Incentive Plan, as amended, or the 2013 Plan, as a material inducement to Mr.Russell’s acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The exercise price per share shall not be less thanthe fair value of the Company’s underlying common stock on the grant date and no option may have a term in excess of ten years. In June 2018, theCompany increased the aggregate number of shares of common stock authorized for issuance under the 2013 Plan by 2,500,000 shares. Stock option activityfor employees and non-employees for the year ended December 31, 2018 is as follows: Shares IssuablePursuant toStock Options Weighted-Average ExercisePrice Weighted-AverageRemainingContractualTerms (years) Total IntrinsicValue (inthousands) Outstanding January 1, 2018 6,132,650 $6.54 8.4 — Granted 2,658,500 $7.92 Exercised (129,978) $5.05 Forfeited (163,125) $6.97 Outstanding December 31, 2018 8,498,047 $6.99 8.1 $5,214 Exercisable December 31, 2018 3,745,660 $6.44 6.7 $3,344 Available for future grant 769,779 F-16 The weighted average grant-date fair value of stock options outstanding on December 31, 2018 was $5.18 per share. Total unrecognized compensation costsrelated to non-vested stock options at December 31, 2018 was approximately $23.7 million and is expected to be recognized within future operating resultsover a weighted-average period of 3.2 years. The total intrinsic value of the options exercised during the years ended December 31, 2018 and 2017 wasapproximately $0.8 million and $0.7 million, respectively.The expected term of the employee-related options was estimated using the “simplified” method as defined by the Securities and Exchange Commission’sStaff Accounting Bulletin No. 107, Share-Based Payment. The volatility assumption was determined by examining the historical volatilities for industry peercompanies, as the Company did not have sufficient trading history for its common stock. The risk-free interest rate assumption is based on the U.S. Treasuryinstruments whose term was consistent with the expected term of the options. The dividend assumption is based on the Company’s history and expectation ofdividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in theforeseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the optionsThe Company uses the Black-Scholes model to estimate the fair value of stock options granted. For stock options granted to employees during the yearsended December 31, 2018 and 2017, the Company utilized the following assumptions: Year ended December 31, 2018 2017 Expected term (years) 5.5-6.25 5.5-6.25 Risk free interest rate 2.33-3.01% 1.83-2.25% Volatility 76-83% 79-84% Dividend yield 0% 0% Weighted average grant date fair value per share of common stock $5.57 $4.50 Stock-Based Awards Granted to Non-employees-The Company from time to time grants options to purchase common stock to non-employees for servicesrendered and records expense ratably over the vesting period of each award. The Company estimates the fair value of the stock options using the Black-Scholes valuation model at each reporting date. The Company granted 215,000 stock options to non-employees and recorded stock-based compensationexpense of $1,033,000 during the year ended December 31, 2018. The Company granted 480,000 stock options to non-employees and recorded stock-basedcompensation expense of $287,000 during the year ended December 31, 2017. For stock options granted to non-employees, the Company utilized the following assumptions: Year ended December 31, 2018 2017 Expected term (years) 0.3-9.9 8.7-9.9 Risk free interest rate 2.39-2.89% 2.37-2.40% Volatility 75-109% 111-113% Dividend yield 0% 0% Weighted average reporting date fair value per share of common stock $5.91 $5.54 RSU activity under the Plan for the year ended December 31, 2018 is as follows: RSUs Weighted-AverageGrant Date Fair Value Unvested January 1, 2018 185,950 $11.86 Granted — $— Vested (58,650) $12.19 Forfeited — $— Unvested December 31, 2018 127,300 $11.71 RSUs awarded to employees generally vest one‑fourth per year over four years from the anniversary of the date of grant, provided the employee remainscontinuously employed with the Company. Shares of the Company’s stock are delivered to the employee upon vesting, subject to payment of applicablewithholding taxes. The fair value of RSUs is equal to the closing price of the Company’s common stock on the date of grant. Total unrecognizedcompensation costs related to non-vested RSUs at December 31, 2018 wasF-17 approximately $1.5 million and is expected to be recognized within future operating results over a period of 2.07 years. The total fair value of shares vestedduring the years ended December 31, 2018 and 2017 was approximately $0.5 million and $0.3 million, respectively. The following table presents stock-based compensation expense included in the Company’s consolidated statements of operations: Year ended December 31, 2018 2017 Research and development $2,257,102 $1,966,126 General and administrative 5,925,576 3,066,997 Total $8,182,678 $5,033,123 NOTE 9 — INCOME TAXESThe provision for federal, foreign and state income taxes for the years ended December 31, 2018 and 2017 are as follows: Year ended December 31, 2018(1) 2017 Current income tax provision (benefit) Federal $— $— Foreign — — State — — Deferred income tax provision (benefit) Federal — (9,376,272)Foreign — — State — — Total income tax provision (benefit) $— $(9,376,272) (1)There was no tax provision for income taxes for the year ended December 31, 2018 due to losses.Net deferred tax assets (liabilities) as of December 31, 2018 and 2017 consist of the following: December 31, December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $15,049,549 $18,265,530 Research and development tax credits 145,115 145,115 Capitalized research and development costs 22,072,598 14,858,509 Stock-based compensation 5,532,341 4,180,651 Deferred start-up and license costs 5,929,901 6,532,419 Deferred Revenue 11,249,174 3,053,174 Other — 129,082 Net deferred tax assets 59,978,678 47,164,480 Valuation allowance (54,687,950) (41,878,528)Net deferred tax assets $5,290,728 $5,285,952 Deferred tax liabilities: In-process research and development (9,343,440) (9,343,440)Other (4,776) — Net deferred tax liabilities $(4,057,488) $(4,057,488) F-18 A reconciliation between the Company’s effective tax rate and the federal statutory rate for the years ended December 31, 2018 and 2017 are as follows: Year ended December 31, 2018 2017 Federal statutory rate (21.00%) (34.00%)Permanent differences 0.38% 0.66%State income taxes 0.00% 0.00%Valuation allowance 20.62% 56.33%Effective tax rate 0.00% 22.99% In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assetswill not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in whichthose temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, andtax planning strategies in making this assessment. Based upon the level of historical losses and the uncertainty of future taxable income over the periodswhich the Company will realize the benefits of its net deferred tax assets, management believes it is more likely than not that the Company will not realizethe benefits on the balance of its net deferred tax asset and, accordingly, the Company has established a full valuation allowance on its net deferred tax assets.The valuation allowance increased by approximately $12.8 million and decreased by $9.9 million during the years ended December 31, 2018 and 2017.As of December 31, 2018, the Company had approximately $53.9 million of Federal net operating losses that will begin to expire in 2027. As of December31, 2018, the Company's wholly owned subsidiary had approximately $2.6 million of operating losses in Switzerland which have begun to expire. As ofDecember 31, 2018, the Company had approximately $7.7 million of New Jersey and approximately $40.6 million of Massachusetts operating losses thatwill begin to expire in 2029 and 2033, respectively. As of December 31, 2018, the Company had approximately $0.2 million of federal research anddevelopment credits that will begin to expire in 2027. The Internal Revenue Code ("IRC") limits the amounts of net operating loss carryforwards that acompany may use in any one year in the event of certain cumulative changes in ownership over a three-year period as described in Section 382 of the IRS.The Company has not performed a detailed analysis to determine whether an ownership change has occurred as of December 31, 2018.On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Act”), resulting in significantmodifications to existing law. The Company completed the accounting for the effects of the Act during 2017. The Company’s financial statements for theyear ended December 31, 2017, reflected the effects of the Act which included a reduction in the corporate tax rate from 34% to 21%. Accordingly, theCompany’s deferred tax assets and liabilities were revalued at the enacted rates effective in 2018 and in future years; the reduction in federal rate from 34% to21% resulted in no impact to total income tax expense. In addition to the federal rate change impact, the Company accounted for the impact of legislation onthe timing of deferred tax positions and overall financial statement presentation, resulting in a total income tax benefit of $9.4 million related to futureimplications of indefinite lived deferred tax positions in 2017. As the accounting for the effects was complete during 2017, no further changes impacted taxpositions during the period ending December 31, 2018.This legislative change regarding the carryforward period of net operating losses impacts the Company’s indefinite lived deferred tax liabilities related to itsIPR&D intangibles. Prior to the change in tax law, the Company’s net operating losses could not be used to offset deferred tax liabilities resulting fromtaxable temporary differences with an indefinite life. After the legislative change, federal net operating loss incurred after December 31, 2017 will have anindefinite life. As a result, the Company’s deductible temporary differences will reverse and create unlimited lived deferred tax assets which may be availableto offset indefinite lived deferred tax liabilities. Accordingly, the Company has recognized a tax benefit for the period ending December 31, 2017 to reflectthis reversal pattern.The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subjectto examination by federal and state jurisdictions, where applicable. There are currently no pending income tax examinations. The Company’s tax years arestill open under statute from 2012 to the present.As of December 31, 2018 and 2017, the Company had no liability recorded for unrecognized tax benefits. The Company classifies penalties and interestexpense related to income tax liabilities as an income tax expense. There were no interest and penalties recognized in the statements of operations for theyears ended December 31, 2018 and 2017, or accrued on the balance sheets as of December 31, 2018 and 2017. F-19 NOTE 10 — COMMITMENTS AND CONTINGENCIESOn October 2, 2017, the Company entered into an office sublease agreement (the “Sublease”) with Profitect, Inc. (the “Sublandlord”) to subleaseapproximately 5,923 rentable square feet of office space located at 1601 Trapelo Road, Waltham, MA 02451 (the “Premises”). The term of the Subleasebegan on November 1, 2017 and will expire on July 30, 2021, with a monthly rental rate starting at $14,808 and escalating to a maximum monthly rental rateof $16,288 in the final 12 months of the term. The Sublandlord has agreed to provide the Premises to the Company free of charge for the first two months ofthe term. The Company will recognize the remaining expense on a straight-line basis over the remaining lease term which will expire on July 30, 2021. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of the Company’s businessactivities. At this time, the Company is not aware of any such legal proceedings or claims. The Company is not aware of any claim or litigation, the outcomeof which, if determined adversely to the Company, would have a material effect on the Company’s financial position or results of operations. NOTE 11 — RELATED PARTY TRANSACTIONSIn January 2016, the Company entered into a services agreement with V-Watch SA (“V-Watch”), for approximately $105 thousand for the use of V-Watch’sSomnoArt device for monitoring sleep in the roluperidone Phase 2b and MIN-117 Phase 2a trials. The Company’s Chief Executive Officer is the chairman ofthe board of directors of V-Watch. Funds affiliated with Index Ventures, a stockholder of the Company, hold greater than 10% of the outstanding capitalstock of V-Watch.Also refer to Note 6 – Co-Development and License Agreement and Note 7 – Stockholder’s Equity for additional related party transactions. NOTE 12 — QUARTERLY RESULTS (Unaudited) Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 (in thousands, except per share data) Total revenues $— $— $— $— Operating loss (12,744) (12,935) (12,424) (13,627)Net loss (12,418) (12,529) (12,021) (13,203)Loss per share, basic and diluted $(0.32) $(0.32) $(0.31) $(0.34) Three Months Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (in thousands, except per share data) Total revenues $— $— $— $— Operating loss (10,485) (9,746) (11,407) (9,532)Net (loss) income (10,645) (9,780) (11,260) 162 Loss per share, basic and diluted $(0.30) $(0.27) $(0.28) $0.00 NOTE 13 — SUBSEQUENT EVENTSNone. F-20 ITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.ITEM 9A.Controls and ProceduresEvaluation of Disclosure Controls and ProceduresWe maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the ExchangeAct, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act isrecorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include,without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submitsunder the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, asappropriate to allow timely decisions regarding required disclosure.Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer),evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2018. Based on the evaluation of our disclosure controls andprocedures as of December 31, 2018, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls andprocedures were effective at a reasonable assurance level.Management Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange ActRule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, includingour principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.As of December 31, 2018, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by theCommittee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on thisassessment, our management concluded that, as of December 31, 2018, our internal control over financial reporting was effective based on those criteria. Allinternal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide onlyreasonable assurance with respect to financial statement preparation and presentation.This annual report does not include an attestation report of our registered public accounting firm due to a transition period established by the JOBS Act foremerging growth companies.Changes in Internal Control over Financial ReportingThere were no changes in internal control over financial reporting during the fourth quarter that would have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting.ITEM 9B.Other InformationNone.65 Part III ITEM 10.Directors, Executive Officers and Corporate GovernanceThe information required by this Item 10 will be contained in the sections entitled “Election of Directors,” “Corporate Governance” and“Section 16(a) Beneficial Ownership Reporting Compliance” appearing in the definitive proxy statement we will file in connection with our 2019 AnnualMeeting of Stockholders and is incorporated by reference herein. The information required by this item relating to executive officers may be found in Part I,Item 1 of this report under the heading “Business—Executive Officers” and is incorporated herein by reference. ITEM 11.Executive CompensationThe information required by this Item 11 will be contained in the sections entitled “Executive and Director Compensation,” “Executive and DirectorCompensation—Compensation Committee Interlocks and Insider Participation” and “Executive and Director Compensation—Compensation CommitteeReport” appearing in the definitive proxy statement we will file in connection with our 2019 Annual Meeting of Stockholders and is incorporated byreference herein. ITEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by this Item 12 will be contained in the sections entitled “Ownership of Our Common Stock” and “Executive and DirectorCompensation—Equity Compensation Plan Information” appearing in the definitive proxy statement we will file in connection with our 2019 AnnualMeeting of Stockholders and is incorporated by reference herein. ITEM 13.Certain Relationships and Related Person Transactions, and Director IndependenceThe information required by this Item 13 will be contained in the sections entitled “Certain Relationships and Related Person Transactions” appearing in thedefinitive proxy statement we will file in connection with our 2019 Annual Meeting of Stockholders and is incorporated by reference herein. ITEM 14.Principal Accounting Fees and ServicesThe information required by this Item 14 will be contained in the section entitled “Corporate Governance—Principal Accountant Fees and Services”appearing in the definitive proxy statement we will file in connection with our 2019 Annual Meeting of Stockholders and is incorporated by reference herein. 66 Part IV ITEM 15.Exhibits and Financial Statement Schedules(a)Documents filed as part of Form 10-K. (1)Financial StatementsReport of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2018 and 2017Consolidated Statements of Operations for the Years Ended December 31, 2018 and 2017Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2018 and 2017Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017Notes to Consolidated Financial Statements (2)SchedulesSchedules have been omitted as all required information has been disclosed in the financial statements and related footnotes. (3)ExhibitsThe following exhibits are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference. ExhibitNo. Description of Exhibit Form File No. Exhibit Filing Date FiledHerewith 2.1 Agreement and Plan of Merger of Sonkei Pharmaceuticals,Inc. with and into Cyrenaic Pharmaceuticals, Inc., dated as ofNovember 12, 2013 S-1 333-195169 10.11 April 9, 2014 2.2 Certificate of Merger Merging Sonkei Pharmaceuticals, Inc.with and into Cyrenaic Pharmaceuticals, Inc., dated as ofNovember 12, 2013 S-1/A 333-195169 3.3 June 10, 2014 3.1 Amended and Restated Certificate of Incorporation of theRegistrant S-1/A 333-195169 3.1 June 10, 2014 3.2 Amended and Restated Bylaws of the Registrant S-1/A 333-195169 3.2 June 10, 2014 4.1 Form of Common Stock Certificate S-1/A 333-195169 4.1 June 10, 2014 4.2 Investor Rights Agreement among the Registrant f/k/aCyrenaic Pharmaceuticals, Inc. and certain of its securityholders, dated as of August 29, 2007 S-1/A 333-195169 4.2 June 10, 2014 4.3 Amendment No. 1 to Investor Rights Agreement among theRegistrant and certain of its security holders, dated as ofDecember 20, 2013 S-1/A 333-195169 4.3 June 10, 2014 10.1 Share Purchase Agreement between the Registrant, Mind-NRG SA and Various Shareholders dated as of February 11,2014 S-1 333-195169 10.13 April 9, 2014 10.2 Common Stock Purchase Agreement between Johnson &Johnson Development Corporation and the Registrant, datedas of February 13, 2014 S-1 333-195169 10.14 April 9, 2014 10.3 Loan Agreement by and among certain stockholders and theiraffiliates and the Registrant, dated as of April 30, 2014 S-1/A 333-195169 10.26 June 10, 2014 10.4 Loan Agreement by and among certain stockholders and theiraffiliates and the Registrant, dated as of May 23, 2014 S-1/A 333-195169 10.27 June 10, 2014 67 ExhibitNo. Description of Exhibit Form File No. Exhibit Filing Date FiledHerewith 10.5 Stock Purchase Agreement between Care Capital InvestmentsIII LP, Index Ventures III L.P. and the Registrant f/k/aCyrenaic Pharmaceuticals, Inc., dated as of August 29, 2007 S-1 333-195169 10.19 April 9, 2014 10.6 Amendment No. 1 to Stock Purchase Agreement betweenCare Capital Investments III LP, Index Ventures III L.P. andthe Registrant and various Shareholders, dated as of March28, 2014 S-1 333-195169 10.20 April 9, 2014 10.7† Employment Agreement between Remy Luthringer andMind-NRG SA, the Registrant's subsidiary, dated as of April8, 2014 S-1 333-195169 10.22 April 9, 2014 10.8† Employment Agreement between Geoff Race and Mind-NRGSA, the Registrant's subsidiary, dated as of April 8, 2014 S-1 333-195169 10.23 April 9, 2014 10.9† Form of Indemnification Agreement between the Registrantand each of its directors and executive officers S-1/A 333-195169 10.1 June 10, 2014 10.10* License Agreement between Mitsubishi Pharma Corporationand the Registrant f/k/a Cyrenaic Pharmaceuticals, Inc., datedas of August 30, 2007 S-1/A 333-195169 10.2 June 10, 2014 10.11* Amendment to License Agreement between MitsubishiTanabe Pharma Corporation and the Registrant f/k/aCyrenaic Pharmaceuticals, Inc., dated as of June 16, 2011 S-1/A 333-195169 10.3 June 10, 2014 10.12* Second Amendment to License Agreement betweenMitsubishi Tanabe Pharma Corporation and the Registrant,dated as of January 20, 2014 S-1/A 333-195169 10.4 June 10, 2014 10.13* License Agreement between Mitsubishi Tanabe PharmaCorporation and the Registrant as successor in interest toSonkei Pharmaceuticals, Inc., dated as of September 1, 2008 S-1/A 333-195169 10.5 June 10, 2014 10.14* Amendment to License Agreement between MitsubishiTanabe Pharma Corporation and the Registrant, dated as ofJanuary 20, 2014 S-1/A 333-195169 10.6 June 10, 2014 10.15* Co-Development and License Agreement between JanssenPharmaceutica, N.V. and the Registrant, dated as of February13, 2014 S-1/A 333-195169 10.7 June 10, 2014 10.16† Employment Agreement between Joseph Reilly and theRegistrant, dated as of December 23, 2013 S-1/A 333-195169 10.9 June 10, 2014 10.17† Amended and Restated 2013 Equity Incentive Plan of theRegistrant 8-K 001-36517 99.1 June 11, 2018 10.18 Loan and Security Agreement by and among Oxford FinanceLLC, Silicon Valley Bank and the Registrant, dated as ofJanuary 16, 2015 8-K 001-36517 10.1 January 20, 2015 10.19 Form of Securities Purchase Agreement between certaininvestors referenced therein and the Registrant, dated as ofMarch 13, 2015 8-K 001-36517 10.1 March 18, 2015 10.20 Form of Registration Rights Agreement between certaininvestors referenced therein and the Registrant, dated as ofMarch 13, 2015 8-K 001-36517 10.3 March 18, 2015 10.21 Second Amendment to License Agreement betweenMitsubishi Tanabe Pharma Corporation and the Registrant,dated as of April 21, 2015 10-Q 001-36517 10.5 May 7, 2015 68 ExhibitNo. Description of Exhibit Form File No. Exhibit Filing Date FiledHerewith 10.22† Amended and Restated Non-Employee DirectorCompensation Plan 10-Q 001-36517 10.2 August 2, 2018 10.23 First Amendment to Loan and Security Agreement, dated asof August 27, 2015, by and among Oxford Finance LLC,Silicon Valley Bank and the Registrant 8-K 001-36517 10.1 August 28, 2015 10.24† Employment Agreement between Fred Ahlholm and theRegistrant, dated as of May 30, 2014 10-Q 001-36517 10.2 November 5, 2015 10.25 Second Amendment to Loan and Security Agreement, datedas of February 23, 2016, by and among Oxford Finance LLC,Silicon Valley Bank and the Registrant 8-K 001-36517 10.1 February 25, 2016 10.26 Common Stock Purchase Agreement, dated March 17, 2016,by and between David Kupfer and the Registrant 8-K 001-36517 10.1 March 18, 2016 10.27† Employment Agreement, dated as of August 1, 2016, by andbetween Mind-NRG SARL and Dr. Remy Luthringer 10-Q 001-36517 10.1 August 4, 2016 10.28† Employment Agreement, dated as of August 1, 2016, by andbetween Mind-NRG SARL and Geoffrey Race 10-Q 001-36517 10.2 August 4, 2016 10.29† Employment Agreement, dated as of August 1, 2016, by andbetween the Registrant and Frederick Ahlholm 10-Q 001-36517 10.3 August 4, 2016 10.30† Employment Agreement, dated as of August 1, 2016, by andbetween the Registrant and Mark S. Levine 10-Q 001-36517 10.4 August 4, 2016 10.31† Employment Agreement, dated as of August 1, 2016, by andbetween the Registrant and Joseph Reilly 10-Q 001-36517 10.5 August 4, 2016 10.32† Form of Restricted Stock Unit Agreement under the Amendedand Restated 2013 Equity Incentive Plan of the Registrant 8-K 001-36517 10.1 December 16, 2016 10.33† Form of Option Grant Agreement under the Amended andRestated 2013 Equity Incentive Plan 10-K 001-36517 10.36 March 13, 2017 10.34 Sublease Agreement dated October 2, 2017 by and betweenthe Registrant and Profitect, Inc. NV 10-Q 001-36517 10.1 November 6,2017 10.35 Amendment No. 1 to Co-Development and LicenseAgreement dated June 13, 2017, by and between theRegistrant and Janssen Pharmaceutica NV 8-K 001-36517 10.1 June 14, 2017 10.36 Stock Repurchase Agreement dated June 13, 2017 by andbetween the Registrant and Johnson & Johnson Innovation-JJDC Inc. 8-K 001-36517 10.2 June 14, 2017 10.37† Offer Letter by and between the Registrant and Rick Russell,dated December 11, 2017. 8-K 001-36517 10.1 December 11, 2017 10.38† New Hire Inducement Stock Option Grant by and between theRegistrant and Rick Russell, dated December 11, 2017. 8-K 001-36517 10.2 December 11, 2017 10.39† New Hire Inducement Restricted Stock Unit Grant by andbetween the Registrant and Rick Russell, dated December 11,2017. 8-K 001-36517 10.3 December 11, 2017 69 ExhibitNo. Description of Exhibit Form File No. Exhibit Filing Date FiledHerewith 21.1 List of Subsidiaries X 23.1 Consent of Deloitte & Touche, LLP, independent registeredpublic accounting firm X 24.1 Power of Attorney (included on the Signature page of thisAnnual Report on Form 10-K) X 31.1 Certification of Chief Executive Officer (Principal ExecutiveOfficer) pursuant to Section 302 of Sarbanes-Oxley Act of2002 X 31.2 Certification of Chief Financial Officer (Principal FinancialOfficer) pursuant to Section 302 of Sarbanes-Oxley Act of2002 X 32.1** Certification of Chief Executive Officer (Principal ExecutiveOfficer) and Chief Financial Officer (Principal FinancialOfficer) pursuant to Section 906 of Sarbanes-Oxley Act of2002 X 101.INS XBRL Instance Document X 101.SCH XBRL Taxonomy Extension Schema Document X 101.CAL XBRL Taxonomy Extension Calculation LinkbaseDocument X 101.DEF XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB XBRL Taxonomy Extension Label Linkbase Document X 101.PRE XBRL Taxonomy Extension Presentation LinkbaseDocument X†Indicates management contract or compensatory plan or arrangement.*Confidential treatment has been granted by the Securities and Exchange Commission as to certain portions of this document.**These certifications are being furnished solely to accompany this annual report pursuant to 18 U.S.C. Section 1350, and are not being filed forpurposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the registrant, whethermade before or after the date hereof, regardless of any general incorporation language in such filing.ITEM 16. Form 10-K SummaryNot applicable. 70 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. MINERVA NEUROSCIENCES, INC. By: /s/ Remy Luthringer, Ph.D. Remy Luthringer, Ph.D. Chief Executive Officer(Principal Executive Officer)Date: March 12, 2019POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Remy Luthringer, Ph.D. and GeoffreyRace, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place andstead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this report, and to file the same, with all exhibitsthereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, andeach of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully toall intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or theiror his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. Signature Title Date /s/ Remy Luthringer, Ph.D. Chief Executive Officer andChairman of the Board of Directors(Principal Executive Officer) March 12, 2019Remy Luthringer, Ph.D. /s/ Geoffrey Race Chief Financial Officer(Principal Financial Officer) March 12, 2019Geoffrey Race /s/ Frederick Ahlholm Chief Accounting Officer(Principal Accounting Officer) March 12, 2019Frederick Ahlholm /s/ William F. Doyle Member of the Board of Directors March 12, 2019William F. Doyle /s/ Hans Peter Hasler Member of the Board of Directors March 12, 2019Hans Peter Hasler /s/ Jeryl Hilleman Member of the Board of Directors March 12, 2019Jeryl Hilleman /s/ David Kupfer, MD Member of the Board of Directors March 12, 2019David Kupfer, MD /s/ Fouzia Laghrissi-Thode, MD Member of the Board of Directors March 12, 2019Fouzia Laghrissi-Thode, MD /s/ Jan van Heek Member of the Board of Directors March 12, 2019Jan van Heek 71Exhibit 21.1Subsidiaries of Minerva Neurosciences, Inc. Name Jurisdiction of IncorporationMind-NRG Sarl SwitzerlandMinerva Neurosciences Securities Corporation Massachusetts  Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-205764 and 333-22678 on Form S-3 and Nos. 333-225672, 333-223593,333-222368, 333-216637, 333-210147, 333-203738, and 333-198753 on Form S-8 of our report dated March 12, 2019, relating to the consolidated financialstatements of Minerva Neurosciences, Inc. and subsidiaries appearing in this Annual Report on Form 10-K of Minerva Neurosciences, Inc. for the year endedDecember 31, 2018./s/ DELOITTE & TOUCHE LLPBoston, MassachusettsMarch 12, 2019  Exhibit 31.1CERTIFICATIONSI, Remy Luthringer, certify that:1.I have reviewed this annual report on Form 10-K of Minerva Neurosciences, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date: March 12, 2019 /s/ Remy Luthringer, Ph.D.Remy Luthringer, Ph.D.Chief Executive Officer andChairman of the Board of Directors(Principal Executive Officer)  Exhibit 31.2CERTIFICATIONSI, Geoffrey Race, certify that:1.I have reviewed this annual report on Form 10-K of Minerva Neurosciences, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting.Date: March 12, 2019 /s/ Geoffrey RaceGeoffrey RaceChief Financial Officer(Principal Financial Officer)  Exhibit 32.1CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 ofChapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Remy Luthringer, Chief Executive Officer of Minerva Neurosciences, Inc. (the“Company”), and Geoff Race, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:1.The Company’s Annual Report on Form 10-K for the period ended December 31, 2018, to which this Certification is attached as Exhibit 32.1 (the“Annual Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and2.The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: March 12, 2019 /s/ Remy Luthringer, Ph.D. /s/ Geoffrey RaceRemy Luthringer, Ph.D. Geoffrey RaceChief Executive Officer andChairman of the Board of Directors Chief Financial OfficerThis certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of Minerva Neurosciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing. 

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