10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to 

Commission File No. 001-36517

Minerva Neurosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	26-0784194
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
1601 Trapelo Road, Suite 286 Waltham, MA	02451
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 600-7373

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 preceding 12 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 past 90 days.    YES  ☒    NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  ☒    NO ☐

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 definitions 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	☐ (Do not check if smaller reporting company)	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 financial accounting 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 Act).    YES ☐    NO  ☒

The number of shares of Registrant’s Common Stock, $0.0001 par value per share, outstanding as of July 31, 2018 was 38,774,343.

INDEX TO FORM 10-Q

		Page
	PART I — Financial Information
Item 1.	Financial Statements (unaudited):	4
	Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017	4
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017	5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2018 and 2017	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	27
	PART II — Other Information
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
SIGNATURES		32

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Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q, or Quarterly Report, to "Minerva," “the Company," "we," "us," and "our" refer to Minerva Neurosciences, Inc. and, where appropriate, its subsidiaries.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements reflect our plans, estimates and beliefs. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not transpire. These risks and uncertainties include, but are not limited to, the risks included in this Quarterly Report on Form 10-Q under Part II, Item IA, “Risk Factors.”

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this document. You should read this document with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

All trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

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PART I – Financial Information

Item 1 – Financial Statements

MINERVA NEUROSCIENCES, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
	2018			2017
Assets
Current assets
Cash and cash equivalents	$	68,688,605		$	26,051,821
Marketable securities		39,798,752			102,109,419
Restricted cash		100,000			80,000
Prepaid expenses and other current assets		3,229,438			1,299,184
Total current assets		111,816,795			129,540,424
Marketable securities - noncurrent		—			5,022,982
Equipment, net		42,211			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	$	160,943,213		$	183,698,558
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable	$	1,396,670		$	3,962,664
Accounts payable		1,309,843			1,435,636
Accrued expenses and other current liabilities		2,311,462			1,439,848
Total current liabilities		5,017,975			6,838,148
Deferred taxes		4,057,488			4,057,488
Deferred revenue		41,175,600			41,175,600
Other noncurrent liabilities		30,668			29,878
Total liabilities		50,281,731			52,101,114
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock; $0.0001 par value; 100,000,000 shares authorized; none issued    or outstanding as of June 30, 2018 and December 31, 2017		—			—
Common stock; $0.0001 par value; 125,000,000 shares authorized; 38,749,343 shares    issued and outstanding as of June 30, 2018 and December 31, 2017		3,875			3,875
Additional paid-in capital		299,986,819			295,975,010
Accumulated deficit		(189,329,212	)		(164,381,441	)
Total stockholders’ equity		110,661,482			131,597,444
Total liabilities and stockholders’ equity	$	160,943,213		$	183,698,558

See accompanying notes to condensed consolidated financial statements

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MINERVA NEUROSCIENCES, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Expenses
Research and development	$	9,062,234		$	7,144,133		$	17,511,501		$	14,758,464
General and administrative		3,872,309			2,601,408			8,166,854			5,472,150
Total expenses		12,934,543			9,745,541			25,678,355			20,230,614
Loss from operations		(12,934,543	)		(9,745,541	)		(25,678,355	)		(20,230,614	)
Foreign exchange gains (losses)		29,274			(20,115	)		11,165			(36,798	)
Investment income		411,542			155,657			825,849			214,319
Interest expense		(35,781	)		(170,125	)		(106,430	)		(371,627	)
Net loss	$	(12,529,508	)	$	(9,780,124	)	$	(24,947,771	)	$	(20,424,720	)
Net loss per share, basic and diluted	$	(0.32	)	$	(0.27	)	$	(0.64	)	$	(0.57	)
Weighted average shares outstanding, basic and diluted		38,749,343			36,719,541			38,749,343			36,048,300

See accompanying notes to condensed consolidated financial statements

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MINERVA NEUROSCIENCES, INC.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(Unaudited)

	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
Exercise of common stock warrants		1,621,073		162		9,356,671		—			9,356,833
Exercise of stock options		113,928		12		576,162		—			576,174
Stock-based compensation		—		—		2,541,584		—			2,541,584
Net loss		—		—		—		(20,424,720	)		(20,424,720	)
Balances at June 30, 2017		36,759,003	$	3,676	$	251,311,357	$	(153,282,954	)	$	98,032,079
Balances at January 1, 2018		38,749,343	$	3,875	$	295,975,010	$	(164,381,441	)	$	131,597,444
Stock-based compensation		—		—		4,011,809		—			4,011,809
Net loss		—		—		—		(24,947,771	)		(24,947,771	)
Balances at June 30, 2018		38,749,343	$	3,875	$	299,986,819	$	(189,329,212	)	$	110,661,482

See accompanying notes to condensed consolidated financial statements

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MINERVA NEUROSCIENCES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(24,947,771	)	$	(20,424,720	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,734			6,604
Amortization of debt discount recorded as interest expense		36,638			124,130
Accretion of marketable securities		(82,869	)		(40,185	)
Stock-based compensation expense		4,011,809			2,541,584
Changes in operating assets and liabilities
Prepaid expenses and other current assets		(1,930,254	)		406,656
Accounts payable		(125,793	)		(60,672	)
Accrued expenses and other current liabilities		871,614			459,626
Accrued collaborative expenses		—			4,098,287
Other noncurrent liabilities		790			—
Net cash used in operating activities		(22,157,102	)		(12,888,690	)
Cash flows from investing activities:
Proceeds from the maturity and redemption of marketable securities		75,351,000			—
Purchase of marketable securities		(7,934,482	)		(27,366,415	)
Net cash provided by (used in) investing activities		67,416,518			(27,366,415	)
Cash flows from financing activities:
Costs paid in connection with public offering		—			(41,183	)
Proceeds from exercise of common stock warrants		—			9,356,833
Proceeds from exercise of stock options		—			576,174
Repayments of notes payable		(2,602,632	)		(2,425,966	)
Net cash (used in) provided by financing activities		(2,602,632	)		7,465,858
Net increase (decrease) in cash and cash equivalents		42,656,784			(32,789,247	)
Cash, cash equivalents and restricted cash
Beginning of period		26,131,821			82,980,609
End of period	$	68,788,605		$	50,191,362
Supplemental disclosure of non-cash financing activities
Deferred public offering costs included in accounts payable or in accrued    expenses and other current liabilities	$	—		$	191,797
Supplemental disclosure of cash flow information
Cash paid for interest	$	85,082		$	261,749
Reconciliation of the Condensed Consolidated Statements of Cash Flows to the    Condensed Consolidated Balance Sheets
Cash and cash equivalents	$	68,688,605		$	50,191,362
Restricted cash		100,000			80,000
Total cash, cash equivalents and restricted cash	$	68,788,605		$	50,271,362

See accompanying notes to condensed consolidated financial statements

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MINERVA NEUROSCIENCES, INC.

Notes to Condensed Consolidated Financial Statements

As of June 30, 2018 and for the Six Months Ended June 30, 2018 and 2017

(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND LIQUIDITY

Nature of Operations

Minerva Neurosciences, Inc. (“Minerva” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patients suffering from central nervous system 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 potentially address the unmet needs of patients with these diseases. The Company’s lead product candidate is roluperidone (also known as MIN-101), a compound the Company 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 major depressive disorder (“MDD”); MIN-117, a compound the Company is developing for the treatment of MDD; and MIN-301, a compound the Company is developing 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 and Mind-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 Company obtained 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 sales outside the Minerva Territory.

Liquidity

The accompanying financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has limited capital resources and has incurred recurring operating losses and negative cash flows from operations since inception. As of June 30, 2018, the Company has an accumulated deficit of approximately $189.3 million and net cash used in operating activities was approximately $22.2 million during the six months ended June 30, 2018. Management expects to continue to incur operating losses and negative cash flows from operations. The Company has financed its operations to date from proceeds from the sale of common stock, warrants, loans and convertible promissory notes.

As of June 30, 2018, the Company had cash, cash equivalents, restricted cash and marketable securities of $108.6 million. The Company believes that its existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months after the date that the interim condensed 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 the Company’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 product launch and the level of financial resources available. The Company has the ability to adjust its operating plan spending levels based on the timing of future clinical 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. The Company 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 is unable to obtain such additional financing, future operations would need to be scaled back or discontinued.

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NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and the requirements of the Securities and Exchange Commission (“SEC”) in accordance with Regulation S-X, Rule 10-01. Under those rules, certain notes and financial information that are normally required for annual financial statements can be condensed or omitted. In the opinion of the Company’s management, the accompanying financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of June 30, 2018, the results of operations for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The consolidated balance sheet as of December 31, 2017 was derived from the audited annual financial statements. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2018.

Consolidation

The accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries, Mind-NRG Sarl and Minerva Neurosciences Securities Corporation.  Intercompany transactions have been eliminated.

Significant risks and uncertainties

The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital.

The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash equivalents include short-term, highly-liquid instruments, consisting of money market accounts and short-term investments with maturities from the date of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand which reduces counterparty performance risk.

Restricted cash

Cash accounts with any type of restriction are classified as restricted. The Company maintained restricted cash balances as collateral for corporate credit cards in the amount of $100 thousand and $80 thousand at June 30, 2018 and December 31, 2017, respectively.

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Marketable securities

Marketable securities consists of corporate and U.S. government debt securities maturing in eleven months or less. Based on the Company’s intentions regarding its marketable securities, all marketable securities are classified as held-to-maturity and are carried under the amortized cost approach. The Company’s investments in marketable securities are classified as Level 2 within the fair value hierarchy. As of June 30, 2018, remaining final maturities of marketable securities ranged from July 2018 to February 2019, with a weighted average remaining maturity of approximately 2.5 months. The following 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 June 30, 2018:  

	June 30, 2018
	Amortized		Aggregate		Unrealized			Unrealized		Net Carrying
	Cost		Fair Value		Gains			Losses		Value
Marketable securities:
Corporate bonds/notes	$	26,821,004	$	26,759,574	$	(61,430	)	$	—	$	26,821,004
Commercial paper		2,994,853		2,994,853		—			—		2,994,853
U.S. government agency securities		9,982,895		9,976,900		(5,995	)		—		9,982,895
Marketable securities current total	$	39,798,752	$	39,731,327	$	(67,425	)	$	—	$	39,798,752

Research and development costs

Costs incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technology in the Company’s research and development projects as well as fees paid to consultants and various entities that perform certain research and testing on behalf of the Company and costs related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and development functions. The Company determines expenses related to clinical studies based on estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conduct and manage clinical studies on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Company estimates 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 performance of 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-line basis if the anticipated costs are expected to be incurred ratably during the period. Payments for these activities are based on the terms of the individual arrangements, 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 development

In-process research and development (“IPR&D”) assets represent capitalized incomplete research projects that the Company acquired through business combinations. Such assets are initially measured at their acquisition date fair values. The initial fair value of the research projects are recorded as intangible assets on the balance 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 of research and development efforts associated with the project. An IPR&D asset is considered abandoned when it ceases to be used (that is, research and development 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 that point, the asset is considered to be disposed of and is written off. Upon successful completion of each project, the Company will make a determination about the then remaining useful life of the intangible asset and begin amortization. The Company tests its indefinite-lived intangibles, IPR&D assets, for impairment annually on November 30 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. When testing indefinite-lived intangibles for impairment, the Company may assess qualitative factors for its indefinite-lived intangibles to determine 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 bypass this qualitative assessment for some or all of its indefinite-lived intangibles and perform the quantitative impairment test that compares the fair value of the indefinite-lived intangible asset with the asset’s carrying amount. There was no impairment of IPR&D for the three and six months ended June 30, 2018 or 2017.

Stock-based compensation

The 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 value over the requisite service period of the awards. The Company determines the fair value of stock-based awards using the Black-Scholes option-pricing model which uses both historical and current market data to

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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”) is equal 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 the equity instrument is reached or the date at which the counterparty’s performance is complete. The Company determines the fair value of stock-based awards granted to non-employees similar to the way fair value of awards are determined for employees except that certain assumptions used in the Black-Scholes option-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 for any change in fair value from the previous valuation until the award vests.

Foreign currency transactions

The Company’s functional currency is the US dollar. The Company pays certain vendor invoices in the respective foreign currency. The Company records an expense in US dollars at the time 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 a foreign currency gain or loss.

Loss per share

Basic 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 per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted 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 the Company’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.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents and marketable securities (current and non-current). 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 financial institutions and monitoring their credit ratings. Marketable securities consist primarily of corporate bonds, with fixed interest rates. Exposure to credit risk of marketable securities is reduced by maintaining a diverse portfolio and monitoring their credit ratings.

Equipment

Equipment 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 assets

The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. If required, the Company compares the estimated undiscounted future net cash flows to the 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-lived assets are recoverable, and no impairment was deemed necessary at June 30, 2018 and 2017.

Goodwill

The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting 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 the Company determines 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 in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. The Company tests its goodwill for impairment as of November 30. There was no impairment of goodwill for the six months ended June 30, 2018 and 2017.

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Revenue recognition

The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customer. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured. The Company is a development stage company and has 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, Collaboration Arrangements, the Company recognizes revenue as research and development is performed and its respective share of the expenses are incurred. The Company assesses whether the arrangement contains multiple elements or deliverables, which may include (1) licenses to the Company's technology, (2) research and development activities performed for the collaboration partner, and (3) participation on Joint Steering Committees.  Payments may include non-refundable, upfront payments, milestone payments upon achieving significant development events, and royalties on future sales.  Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; 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 the deliverable was regularly sold by the Company on a stand-alone basis. The consideration allocated to each unit of accounting is then recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Supply or service transactions may involve 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.

Deferred revenue

The Company applies the revenue recognition guidance in accordance with FASB ASC 606, Revenue from Contracts with Customers. Using FASB ASC 606, Revenue that is unearned is deferred. Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is classified as long-term deferred revenue.

Segment information

Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief decision maker, who is the Chief Executive Officer, reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment.

Comprehensive loss

The Company had no items of comprehensive loss other than its net loss for each period presented.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the FASB and are adopted by the Company as of the specified effective date.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Subsequently, the FASB also issued ASU 2015-14,  Revenue from Contracts with Customers (Topic 606) , which adjusted the effective date of ASU 2014-09; ASU No. 2016-08,  Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09; ASU No. 2016-10,  Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which clarifies identifying performance obligation and licensing implementation guidance and illustrations in ASU 2014-09; and ASU No. 2016-12,  Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which addresses implementation issues and is intended to reduce the cost and complexity of applying the new revenue standard in ASU 2014-09 (collectively, the “Revenue ASUs”).

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The Revenue ASUs provide an accounting standard for a single comprehensive model for use in accounting for revenue arising from contracts with customers and 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), or retrospectively 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 guidance compared 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 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years.  The Company adopted the new standard on January 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 to include amounts described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-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 standard did not have a material impact on the Company’s consolidated financial statements. Cash, cash equivalents, and restricted cash reported on the Consolidated Statements of Cash Flows includes restricted cash of $80 thousand as of December 31, 2016, June 30, 2017, December 31, 2017 and $100 thousand as of June 30, 2018.

Accounting Pronouncements Not Yet Adopted

In 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 a ROU 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 after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Although the Company is currently assessing the impact of adoption of ASU 2016-02 on its consolidated financial statements, the Company currently believes the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on the Company’s balance sheet for operating leases. Refer to Note 9, Commitments and Contingencies, for the Company's current lease commitments.

In January 2017, the FASB issued ASU No. 2017-4, Intangibles — Goodwill and Other (Topic 350). The new standard simplifies the Test for Goodwill Impairment. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-8, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities. The new standard is intended to enhance the accounting for the amortization of premiums for purchased callable debt securities. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’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. The new standard is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. This update expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The new standard supersedes Subtopic 505-50, Equity-Equity-Based payments to Non-Employees. The update is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The adoption of this guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements.

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NOTE 3 — ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:  

	June 30, 2018		December 31, 2017
Research and development costs and other accrued expenses	$	1,053,801	$	1,162,441
Accrued bonus		811,867		5,899
Professional fees		372,139		251,000
Interest payable		5,217		20,508
Vacation pay		68,438		—
	$	2,311,462	$	1,439,848

NOTE 4 — NET LOSS PER SHARE OF COMMON STOCK

Diluted 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 the Company’s net loss. Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. The following table sets forth the computation of basic and diluted loss per share for common stockholders:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net loss	$	(12,529,508	)	$	(9,780,124	)	$	(24,947,771	)	$	(20,424,720	)
Weighted average shares of    common stock outstanding		38,749,343			36,719,541			38,749,343			36,048,300
Net loss per share of common    stock – basic and diluted	$	(0.32	)	$	(0.27	)	$	(0.64	)	$	(0.57	)

The following securities outstanding at June 30, 2018 and 2017 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of loss per share is antidilutive:

	June 30,
	2018		2017
Common stock options		6,655,150		3,891,596
Restricted stock units		185,950		194,600
Common stock warrants		40,790		40,790

NOTE 5 — DEBT

Loan and Security Agreement

On 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 up to $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 A Loans bear interest at a fixed rate of 7.05% per annum. The Company believes that the Company's debt obligations accrue interest at rates which approximate prevailing market rates for instruments with similar characteristics and, accordingly, the carrying values for these instruments approximate fair value.

In August 2015, the Lenders and the Company entered into a First Amendment to the Loan Agreement, amending certain milestones related to the six month extension of the interest-only repayment period of the Term A Loans.  By raising at least $30.0 million in gross capital (including at least $20.0 million from the sale of equity securities) and completing the first dosing of its Phase 2 clinical trial for MIN-117 prior to December 31, 2015, the Company achieved the interest-only milestones under the Loan Agreement and elected to extend the interest-only period an additional six months and reduce the repayment term by six months. Through August 1, 2016, the Company was obligated only to make monthly interest payments on the outstanding principal balance on the Term A Loans, followed by 24 months of equal principal and interest payments.

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On or prior to March 31, 2016, the Company was permitted to borrow additional term loans in the aggregate principal amount up to $5 million, subject to the satisfaction of certain borrowing conditions, including the Company’s achievement of primary endpoints on its Phase 2a trials for MIN-117 and seltorexant programs. In June 2016, the Company irrevocably elected not to borrow the additional $5 million available under the Term Loans.

The Company paid a facility fee at the time of borrowing of $75 thousand for access to the Term Loans and will be required to pay a final payment of 5.1% of the total amount borrowed, which has been included as a component of the debt discount and is amortized to interest expense over the term of the loans.  The outstanding Term A Loans and debt discount are as follows:

	June 30, 2018
Term A Loans	$	888,071
Less: debt discount and financing costs		(574	)
Less: current portion		(1,396,670	)
Accrued portion of final payment		509,173
Long-term portion	$	—

For the three months ended June 30, 2018 and 2017, the Company recognized interest expense of $43 thousand and $0.2 million, respectively, including $12 thousand and $0.1 million, respectively, related to the debt discount. For the six months ended June 30, 2018 and 2017, the Company recognized interest expense of $0.1 million and $0.4 million respectively, including $37 thousand and $0.1 million, respectively, related to the debt discount.    

The Term Loans mature on August 1, 2018. The Company may prepay all, but not less than all, of the loaned amount upon 30 days’ advance notice to the Lenders, provided that the Company will be obligated to pay a prepayment fee equal to (i) 3% of the outstanding balance, if the loan is prepaid within 24 months of the funding date, (ii) 2% of the outstanding balance, if the loan is prepaid between 24 and 36 months of the funding date and (iii) 1% of the outstanding balance, if the loan is prepaid thereafter (each, a “Prepayment Fee”).The expected remaining repayment of the $10.0 million Term A Loan principal is $888,071 during 2018.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets, other than its intellectual property. The Company has also agreed not to pledge or otherwise encumber its intellectual property assets, except that it may grant certain exclusive and non-exclusive licenses of its intellectual property as set forth in the Loan Agreement. In addition, the Company pledged all of its equity interests in Minerva Neurosciences Securities Corporation and 65% of its equity interests in Mind-NRG, Sarl as security for its obligations under the Loan Agreement.

Upon the occurrence of certain events, including but not limited to the Company’s failure to satisfy its payment obligations under the Loan Agreement, the breach of certain of its other covenants under the Loan Agreement, or the occurrence of a material adverse change, the Lenders will have the right, among other remedies, to declare all principal and interest immediately due and payable, to take control of the Company’s cash in its SVB deposit account, and will have the right to receive the final payment fee and, if the payment of principal and interest is due prior to maturity, the applicable Prepayment Fee. As of June 30, 2018, the Company was in compliance with all covenants set forth in the Loan Agreement.

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 upon completion 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 patent applications 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), the Company will have rights to manufacture seltorexant, also known as JNJ-42847922. The Company has granted to the licensor an exclusive license, with the right 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 of research and development expense in 2014.

The original Agreement contains certain provisions, which include the Company’s ability to opt-out of the Agreement upon completion of certain milestones.  If the Company elects to participate in the development program through to the potential commercial approval of seltorexant, the Company will pay a quarterly royalty percentage to the licensor in the high single digits on aggregate net sales for seltorexant products sold by the Company, its affiliates and sublicensees in the Minerva Territory. The licensor will pay a quarterly royalty percentage to the Company in the high single digits on aggregate net sales for seltorexant products sold by the licensor outside the Minerva Territory.  In accordance with the development agreement, the Company will pay 40% of seltorexant development costs related to the joint development of any seltorexant products.

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The Company’s share of aggregate development costs shall not exceed (i) $5.0 million for the period beginning from the effective date of the license and ending following the completion of certain Phase 1b clinical trials and animal toxicology studies, and (ii) $24.0 million for the period beginning from the effective date of the license and ending following the completion of certain Phase 2 clinical trials.  Janssen has a right to opt out at the end of certain development milestones, after which Janssen will not have to fund further development of seltorexant and the Minerva Territory will be expanded to also include all of North America. The Company would then owe Janssen a reduced royalty in the mid-single digits for all sales in the Minerva Territory. Janssen may also terminate the Agreement for the Company’s material breach or certain insolvency events, including if the Company is unable to fund its portion of the development costs.

The Company accounts for the Agreement as a joint risk-sharing collaboration in accordance with ASC 808, Collaboration Arrangements. Payments between the Company and the licensor with respect to each party’s share of seltorexant development costs that have been incurred pursuant to the joint development plan are recorded within research and development expenses or general and administrative expenses, as applicable, in the accompanying consolidated statements of operations due to the joint risk-sharing nature of the activities. The Company has included zero in accrued collaborative expenses, as of June 30, 2018 and December 31, 2017, related to the Agreement. In the six months ended June 30, 2018 and 2017, the Company paid zero and $2.5 million, respectively, related to development activities under the Agreement.

On July 6, 2016, the Company and Janssen agreed that “Decision Point 2” had been reached as defined under the Agreement. As neither party has exercised their right to withdraw from the Agreement, the Company has paid Janssen $3.5 million and have incurred direct expenses of $0.3 million related to development activities under the current phase of development. During the three months ended June 30, 2018 and 2017, the Company recorded an expense of zero and $3.6 million, respectively, for certain development activities in accordance with the terms of the Agreement. During the six months ended June 30, 2018 and 2017, the Company recorded an expense of zero and $6.6 million, respectively, for certain development activities in accordance with the terms of the Agreement.

In June 2017, the Company entered into an amendment to the Agreement (“the Amendment”). The effectiveness of the Amendment was contingent upon approval of its terms by the European Commission and the closing of the acquisition of Actelion Ltd. by affiliates of Janssen.  These conditions were subsequently met, and the Amendment became effective on August 29, 2017. Under the amended Agreement, Janssen has waived its right to royalties on seltorexant insomnia sales in the Minerva Territory. The Company retains all of its rights to seltorexant, including commercialization of the molecule for the treatment of insomnia and as an as adjunctive therapy for MDD, which include an exclusive license in the Minerva Territory, with royalties payable by the Company to Janssen on seltorexant MDD sales. Royalties on sales outside of the Minerva Territory are payable by Janssen to the Company. Janssen made an upfront payment to the Company of $30 million upon the effectiveness 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 payment when 50% of the patients are enrolled in this trial. Janssen further agreed to waive the remaining payments due from the Company until completion of the Phase 2 development of seltorexant. The $30 million payment and $11.2 million in previously accrued collaborative expenses, which were forgiven upon the effective date of the Amendment, will be earned and recognized as revenue as the services are performed from the commencement of Phase 3 development to the completion of the development activities using the proportional performance method. The $30 million payment along with the $11.2 million in previously accrued collaborative expenses have been included under Deferred Revenue on the Company’s balance sheet at June 30, 2018 and December 31, 2017, respectively. In connection with the Amendment, the Company repurchased all of the approximately 3.9 million shares of its common stock previously owned by 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, the Company assumed strategic control of the clinical development of seltorexant for insomnia and has no further financial obligations until the Phase 2b development milestone has been completed, which is expected to occur in the second half of 2019. Upon completion of this development milestone, referred to as “Decision Point 4”, Minerva has the right to opt-out of the Agreement and collect a royalty on worldwide sales of seltorexant in the single digits with no further obligations to Janssen.  If the Company elects to continue past “Decision Point 4” into Phase 3, the Company would be obligated to fund the clinical trials related to insomnia, and receive $40 million in milestone payments from Janssen, and would also 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 the development activities performed under the Agreement.  The participation in the joint steering committee under the Amendment is considered to be not separable from the development activities and therefore the two deliverables are combined into a single unit of account.  The Company concluded that the milestone payments are solely dependent on future developments and therefore are considered non-substantive and will recognize such revenue in the periods in which the milestones are achieved.  Similarly, the Company will recognize royalty revenues in the periods of the sale of the related products, provided that the reported sales are reliably measurable, collectability is reasonably assured and the Company has no further performance obligations.

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NOTE 7 — STOCKHOLDERS’ EQUITY

Public Offering of Common Stock

On 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, for aggregate 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 Act pursuant to a registration statement on Form S-3 (File No. 333-205764) and a related prospectus and prospectus supplement, in each case filed with the Securities and Exchange Commission. The Company incurred $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.  

Share Repurchase

In August 2017, in connection with the Amendment (see Note 6), the Company repurchased all of the approximately 3.9 million shares of its common stock previously owned by Johnson & Johnson Innovation-JJDC Inc. at a per share price of $0.0001, for an aggregate purchase price of approximately $389.

Warrant Exercises

In March 2017, certain investors in the Company’s March 2015 private placement exercised their warrants at an exercise price of $5.772 per share and received an aggregate of 1,621,073 shares of the Company’s common stock. The Company received gross proceeds of approximately $9.4 million from the exercise of these warrants. As of June 30, 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 of the 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 drawn of 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 consecutive trading 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 of common stock at a per share exercise price of $5.516. The warrants are immediately exercisable upon issuance, and other than in connection with certain mergers 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 a Black-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) no dividend 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 and will be amortized to interest expense over the term of the loan. All such warrants were outstanding as of June 30, 2018.  

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NOTE 8 — STOCK AWARD PLAN AND STOCK-BASED COMPENSATION

In December 2013, the Company adopted the 2013 Equity Incentive Plan (as subsequently amended and restated, the “Plan”), which provides for the issuance of options, stock appreciation rights, stock awards and stock units. On January 1, 2018, in accordance with the terms of the Plan, the total shares authorized 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 shares outstanding calculated as of the end of the most recent fiscal year. The exercise price per share shall not be less than the 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. Further, pursuant to Nasdaq listing rules, the Company issued inducement awards in December 2017 outside of the Plan in the form of an option to purchase 775,000 shares of the Company’s common stock and a restricted stock unit award to purchase 40,000 shares of the Company’s common stock. In June 2018, the Company increased the aggregate number of shares of common stock authorized for issuance under the 2013 Plan by 2,500,000 shares. Stock option activity for employees and non-employees under the Plan for the six months ended June 30, 2018 is as follows:  

	Shares Issuable Pursuant to Stock Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Total Intrinsic Value (in thousands)
Outstanding January 1, 2018		6,132,650		$	6.54	8.4			—
Granted		530,000		$	6.61		—		—
Exercised		—		$	—		—		—
Forfeited		(7,500	)	$	12.35		—		—
Outstanding June 30, 2018		6,655,150		$	6.54		8.0	$	14,281
Exercisable June 30, 2018		2,927,683		$	5.64	6.7		$	6,322
Available for future grant		2,742,654

The weighted average grant-date fair value of stock options outstanding on June 30, 2018 was $4.95 per share. Total unrecognized compensation costs related to non-vested stock options at June 30, 2018 was approximately $16.6 million and is expected to be recognized within future operating results over a weighted-average period of 2.9 years.  The total intrinsic value of the options exercised during the six months ended June 30, 2017 was approximately $0.7 million.

The expected term of the employee-related options was estimated using the “simplified” method as defined by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107, Share-Based Payment. The volatility assumption was determined by examining the historical volatilities for industry peer companies, 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. Treasury instruments whose term was consistent with the expected term of the options. The dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the options.

The Company uses the Black Scholes model to estimate the fair value of stock options granted.  For stock options granted during the six months ended June 30, 2018 and 2017, the Company utilized the following assumptions:

	June 30,
	2018		2017
Expected term (years)	5.5-6.25		5.5-6.25
Risk free interest rate	2.33-2.80%		1.83-2.02%
Volatility	76-83%		79-84%
Dividend yield	0%		0%
Weighted average grant date fair value per share of    common stock	$	4.66	$	6.53

Stock-Based Awards Granted to Non-employees- The Company from time to time grants options to purchase common stock to non-employees for services rendered 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 40,000 stock options to non-employees during the six months ended June 30, 2018. The Company recorded stock-based compensation expense for stock options granted to non-employees of $0.5 million and $0.2 million during the six months ended June 30, 2018 and 2017, respectively.   

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For stock options granted to non-employees, the Company utilized the following assumptions:

	June 30,
	2018		2017
Expected term (years)	8.2-9.6		9.2-9.8
Risk free interest rate	2.46-2.84%		2.26-2.30%
Volatility	83-110%		111-113%
Dividend yield	0%		0%
Weighted average reporting date fair value per share of    common stock	$	7.35	$	8.05

RSU activity under the Plan for the six months ended June 30, 2018 is as follows:

			Weighted-Average
			Grant Date
	RSUs		Fair Value
Unvested January 1, 2018		185,950	$	11.86
Granted		—	$	—
Vested		—	$	—
Forfeited		—	$	—
Unvested June 30, 2018		185,950	$	11.86

RSUs awarded to employees generally vest one-fourth per year over four years from the anniversary of the date of grant, provided the employee remains continuously employed with the Company. Shares of the Company’s stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of RSUs is equal to the closing price of the Company’s common stock on the date of grant. Total unrecognized compensation costs related to non-vested RSUs at June 30, 2018 was approximately $1.8 million and is expected to be recognized within future operating results over a period of 2.6 years.

The Company recognized stock-based compensation expense for the six months ended June 30, 2018 and 2017 of $4.0 million and $2.5 million, respectively.  

NOTE 9 — COMMITMENTS AND CONTINGENCIES

On October 2, 2017, the Company entered into an office sublease agreement (the “Sublease”) with Profitect, Inc. (the “Sublandlord”) to sublease approximately 5,923 rentable square feet of office space located at 1601 Trapelo Road, Waltham, MA 02451 (the “Premises”). The term of the Sublease began 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 rate of $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 of the term.

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 business activities. 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 outcome of which, if determined adversely to the Company, would have a material effect on the Company’s financial position or results of operations.

NOTE 10 — RELATED PARTY TRANSACTIONS

In 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’s SomnoArt device for monitoring sleep in the roluperidone Phase 2b and MIN-117 Phase 2a trials. The Company’s Chief Executive Officer is the chairman of the board of directors of V-Watch. Funds affiliated with Index Ventures, a stockholder of the Company, hold greater than 10% of the outstanding capital stock of V-Watch.   

Also refer to Note 6 – Co-Development and License Agreement and Note 7 – Stockholder’s Equity for additional related party transactions.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our annual audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on March 12, 2018.

Overview

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patients suffering from central nervous system, or CNS, diseases. Leveraging our scientific insights and clinical experience, we have acquired or in-licensed four development-stage proprietary compounds that we believe have innovative mechanisms of action and therapeutic profiles that potentially address the unmet needs 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, or MDD; MIN-117 for the treatment of MDD; and MIN-301 for the treatment of Parkinson’s disease. We believe our product candidates have significant potential to improve the lives of a large number of affected patients and their families who are currently not well-served by available therapies.

We have not received regulatory approvals to commercialize any of our product candidates, and we have not generated any revenue from the sales or license of our product candidates. We have incurred significant operating losses since inception. We expect to incur net losses and negative cash flow from operating activities for the foreseeable future in connection with the clinical development and the potential regulatory approval, infrastructure development and commercialization of our product candidates.

Clinical Updates

Roluperidone

Phase 3 Clinical Trial

On December 19, 2017, we announced the screening of the first patient in the pivotal Phase 3 clinical trial of roluperidone (Study MIN-101C07) as monotherapy for negative symptoms in patients diagnosed with schizophrenia.  The trial is a multicenter, randomized, double-blind, parallel-group, placebo-controlled, 12-week study to 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 and patients on placebo will receive either 32 mg or 64 mg of roluperidone.    

We expect approximately 500 patients will be enrolled in this trial at approximately 60 clinical sites in the U.S. and Europe, with about 30 percent of patients coming from the U.S.  Patients will be initially randomized equally to receive one of the two doses of roluperidone or placebo for 12 weeks.  Thereafter, all patients will continue treatment with roluperidone for the 40-week extension period.  Top-line results from the 12-week double blind phase of this trial are expected in the first half of 2019.  

The primary endpoint of this trial will be improvement in negative symptoms in patients treated with roluperidone compared to placebo as measured by the change in the Positive and Negative Syndrome Scale, or PANSS, Marder negative symptoms factor score, or NSFS, over the 12-week double-blind treatment period. 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 resulting analysis confirmed the robustness of the effect of roluperidone for the two tested doses. The key secondary endpoint will be the effect of roluperidone compared to placebo as measured by the Personal and Social Performance, or PSP, total score over the same period.  Additional secondary endpoints will be the 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 months with moderate to severe negative symptoms (>20 on the PANSS negative symptom subscale) and stable positive symptoms.  Patients without severe symptoms of excitement/hyperactivity, suspiciousness, persecution, hostility, uncooperativeness, or poor impulse control will be recruited.  We believe these eligibility criteria represent the real-world patient population who may benefit when the drug is used in clinical practice.  In addition, patients treated with psychotropic agents will need to undergo wash-out before receiving study drug. These parameters were applied in screening the population treated in the Phase 2b trial.  

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Chemistry, Manufacturing and Controls (CMC) program

The CMC scale-up program for roluperidone is ongoing to ensure consistency between the drug batches to be used during pivotal, Phase 3 testing and those that will be available for potential marketing and commercialization pending the completion of our Phase 3 trial and subsequent regulatory submission and review of a New Drug Application (NDA) for roluperidone.  The CMC program requires validation of all aspects of the manufacturing processes required to result in a drug product that consistently meets approved quality standards.

Journal of Clinical Psychiatry Publication

We announced on May 17, 2018 that The Journal of Clinical Psychiatry has published online results demonstrating cognitive improvements in patients with schizophrenia treated with roluperidone.  The results also demonstrated that cognitive improvements correlate with previously reported improvements in negative symptoms.

MIN-117

Phase 2b Trial

We 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 doses of MIN-117, 5.0 mg and 2.5 mg, 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 from baseline in symptoms of anxiety using the Hamilton Anxiety Scale (HAM-A); (2) the change in severity of illness using the Clinical Global Impression of Severity Scale (CGI-S) and Clinical Global Impression of Improvement Scale (CGI-I); and (3) safety over six weeks of treatment.

The study population will consist of adults with a diagnosis of moderate or severe MDD with anxious distress and without psychotic features. Based upon previous clinical observations, 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 at approximately 40 sites in the U.S. and Europe.  Patients will be randomized to one of three arms, including placebo and the two 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.  Top line results of the trial are expected in the first half of 2019.  In preparation for this trial, a food effect study was recently completed, and the preliminary data show that food has no effect on the exposure PK parameters, therefore allowing dosing with or without food.  

Seltorexant (MIN-202)

Phase 2b Trials in MDD

On September 5, 2017, we announced the enrollment of the first patient in a Phase 2b trial of seltorexant as adjunctive therapy to antidepressants in adult patients with MDD who have responded inadequately to antidepressant 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 and to 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 at approximately 85 clinical sites in the U.S., Europe, Russia and Japan

On December 21, 2017, we announced the enrollment of the first patient in a Phase 2b clinical trial comparing seltorexant versus quetiapine as adjunctive therapy in patients with MDD who have responded inadequately to antidepressant therapy (the 2002 trial).  The primary objective of this multi-center, double-blind, randomized, flexible-dose, parallel-group study is to assess the efficacy of flexibly dosed seltorexant compared to flexibly dosed quetiapine as adjunctive therapy to a baseline antidepressant drug in delaying time 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 from administration 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 to four 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 be randomized at approximately 34 sites 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 will continue to take their baseline antidepressant therapy of either an SSRI (selective serotonin reuptake inhibitor) or an SNRI (serotonin-norepinephrine reuptake inhibitor) at the same dose throughout the screening, double-blind and follow-up phases.

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Enrollment in the 2002 study was temporarily suspended during the first quarter of 2018 due to a drug packaging issue.  This issue has been resolved, and enrollment was restarted in the second quarter of 2018.  We are also conducting preclinical fertility studies in female rats to assess the potential relevance to exposing women of child bearing potential to seltorexant.

Phase 2b Trial in Insomnia Disorder

On December 6, 2017, we announced the enrollment of the first patient in a Phase 2b clinical trial of seltorexant 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 with insomnia 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 placebo on 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 of seltorexant 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 will be randomized in this study at clinical sites in the United States, European Union and Japan.  The duration of participation in this study for an individual subject will be up to 61 days, including screening and follow-up.  

MIN-301

We previously announced results from a non-human primate study showing that treatment with an analog of MIN-301 resulted in improvements in a range of symptoms associated with a Parkinson’s disease model in primates. The results confirmed the beneficial effects of MIN-301 in non-primate preclinical models.  We believe these data provide support for advancing MIN-301 into clinical trials for the treatment of Parkinson’s disease in humans. Building upon these data, we are continuing to conduct preclinical studies in preparation for an IND or Investigational Medicinal Product Dossier, or IMPD, filing, with a Phase 1 study expected to commence thereafter.

Financial Overview

Revenue. None of our product candidates have been approved for commercialization and we have not received any revenue in connection with the sale or license of our product candidates. We are evaluating the revenue implications of our Amendment to Co-Development and License Agreement with Janssen.

Research and Development Expenses. Research and development expenses consists of costs incurred in connection with the development of our product candidates, including: fees paid to consultants 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 statistical compilation and analysis; licensing fees; costs related to acquiring clinical trial materials; costs related to compliance with regulatory requirements; and costs related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and development functions. We expense research and development costs as they are incurred.

In the future, we expect research and development expenses to continue 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 make determinations 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 clinical success or failure of each product candidate, the estimated costs to continue the development program relative to our available resources, as well as an ongoing assessment as to each product candidate’s commercial potential. We will need to raise additional capital or may seek additional product collaborations in the future in order to complete the development and commercialization of our product candidates.

General and Administrative Expenses. General and administrative expenses consist principally of costs for functions in executive, finance, legal, auditing and taxes. Our general and administrative expenses 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 qualified staff.

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We expect to continue to incur general and administrative expenses related to operating as a publicly-traded company, including increased audit and legal fees, costs of compliance with securities, corporate governance and other regulations, investor relations expenses and higher insurance premiums. In addition, we expect to incur additional costs as we hire personnel and enhance our infrastructure to support the anticipated growth of our business.

Foreign Exchange (Losses) Gains. Foreign exchange (losses) gains are comprised primarily of losses and gains of foreign currency transactions related to clinical trial expenses denominated in Euros. Since our current clinical trials are conducted in Europe, we incur certain expenses in Euros and record these expenses in U.S. dollars at the time 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 a foreign 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 be conducted in Europe.

Investment Income. Investment income consists of income earned on our cash equivalents and marketable securities (current and non-current).

Interest Expense. Interest expense consists of interest incurred under our current outstanding loan with Oxford Finance LLC, or Oxford, and Silicon Valley Bank, or SVB.

Results of Operations

Comparison of Three Months Ended June 30, 2018 versus June 30, 2017

Research and Development Expenses

Total research and development expenses were $9.1 million for the three months ended June 30, 2018 compared to $7.1 million for the same period in 2017, an increase in total expense of $2.0 million. The increase in research and development expenses primarily reflects higher development expenses for the Phase 3 clinical trial of roluperidone and the Phase 2b clinical trial of MIN-117. These amounts were partially offset by lower development expenses for the seltorexant program due to the Amendment to our Co-Development and License Agreement with Janssen. We expect research and development expenses to increase during 2018 as we increase patient enrollment and related support activities for the roluperidone and MIN-117 clinical trials.

General and Administrative Expenses

Total general and administrative expenses were $3.9 million for the three months ended June 30, 2018 compared to $2.6 million for the same period in 2017, an increase of approximately $1.3 million. This increase in general and administrative expenses was primarily due to an increase in non-cash stock-based compensation expenses and salary costs from increased staffing to support our pre-commercial activities.  We expect general and administrative expenses to increase during 2018 as we begin to invest in the infrastructure necessary to support our growth.  

Foreign Exchange Gains (Losses)

Foreign exchange gains were $29 thousand for the three months ended June 30, 2018 compared to losses of $20 thousand for the same period in 2017, an increase of $49 thousand. The gain was primarily due to clinical activities denominated in Euros.

Investment Income

Investment income was $0.4 million for the three months ended June 30, 2018 compared to $0.2 million for the same period in 2017, an increase of $0.2 million. This increase was due to an increase in investment income on cash equivalents and marketable securities.

Interest Expense

Interest expense was $36 thousand for the three months ended June 30, 2018 compared to $170 thousand for the same period in 2017, a decrease of $134 thousand. This decrease was due to a lower outstanding principal balance on our Term A loans.

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Comparison of Six Months Ended June 30, 2018 versus June 30, 2017

Research and Development Expenses

Total research and development expenses were $17.5 million for the six months ended June 30, 2018 compared to $14.8 million for the same period in 2017, an increase in total expense of $2.7 million. The increase in research and development expenses primarily reflects higher development expenses for the Phase 3 clinical trial of roluperidone and the Phase 2b clinical trial of MIN-117. These amounts were partially offset by lower development expenses for the seltorexant program due to the Amendment to our Co-Development and License Agreement with Janssen. We expect research and development expenses to increase during 2018 as we increase patient enrollment and related support activities for the roluperidone and MIN-117 clinical trials.

General and Administrative Expenses

Total general and administrative expenses were $8.2 million for the six months ended June 30, 2018 compared to $5.5 million for the same period in 2017, an increase of approximately $2.7 million. This increase in general and administrative expenses was primarily due to an increase in non-cash stock-based compensation expenses and salary costs from increased staffing to support our pre-commercial activities.  We expect general and administrative expenses to increase during 2018 as we begin to invest in the infrastructure necessary to support our growth.  

Foreign Exchange Gains (Losses)

Foreign exchange gains were $11 thousand for the six months ended June 30, 2018 compared to losses of $37 thousand for the same period in 2017, an increase of $48 thousand. The loss was primarily due to certain expenses of Mind-NRG and clinical activities denominated in Euros.

Investment Income

Investment income was $0.8 million for the six months ended June 30, 2018 compared to $0.2 million for the same period in 2017, an increase of $0.6 million. The increase was due to investment income on cash equivalents and marketable securities.

Interest Expense

Interest expense was $0.1 million for the six months ended June 30, 2018 compared to $0.4 million for the same period in 2017, a decrease of $0.3 million. The decrease was due to a lower outstanding principal balance on our Term A loans.

Liquidity and Capital Resources

Sources of Liquidity

We have incurred losses and cumulative negative cash flows from operations since our inception in April 2007 and, as of June 30, 2018, we had an accumulated deficit of approximately $189.3 million. We anticipate that we will continue to incur net losses for the foreseeable future as we continue the development and potential commercialization of our product candidates and to support our operations as a public company. At June 30, 2018, we had approximately $108.6 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 interim condensed 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 we have based our estimates are routinely evaluated and may be subject to change. The actual amount of our expenditures will vary depending upon several factors including but not limited to the design, timing and duration of future clinical trials, the progress of our research and development programs, the infrastructure to support a commercial enterprise, the cost of a commercial product launch and the level of financial resources available. We have the ability to adjust our operating plan spending levels based on the timing of future clinical trials which will be predicated upon adequate funding to complete the trials.

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Sources of Funds

Amendment to Co-Development and License Agreement with Janssen

On August 29, 2017, the European Commission approved the Amendment to our Co-Development and License Agreement with Janssen under which Janssen made 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 for seltorexant and a $20 million payment when 50% of the patients are enrolled in this trial. Janssen further agreed to waive the remaining payments due from us 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 share price of $0.0001, for an aggregate purchase price of approximately $389.

Public Offering of Common Stock

On 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 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a public offering price of $7.75, for aggregate gross proceeds to 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 on Form S-3 (File No. 333-205764) and a related prospectus and prospectus supplement, in each case filed with the Securities and Exchange Commission. We incurred $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 Warrants

In March 2017, certain investors in our March 2015 private placement exercised their warrants and received an aggregate of 1,621,073 shares of our common stock. We received gross proceeds of approximately $9.4 million from the exercise of these warrants.

Uses of Funds

To 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 from our collaboration with Janssen. We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize 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 to continue 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 equity offerings, 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, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through government or other third‑party funding, commercialization, marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses 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 to us. If we are unable to obtain additional financing, future operations would need to be scaled back or discontinued. 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 interim condensed financial 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, we have made principal repayments of approximately $9.1 million. We expect to make additional principal repayments of approximately $0.9 million in 2018, in accordance with the terms of the agreement.

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Cash Flows

The table below summarizes our significant sources and uses of cash for the six months ended June 30, 2018 and 2017:

	Six Months Ended
	June 30,
	2018			2017
	(dollars in millions)
Net cash provided by (used in):
Operating activities	$	(22.2	)	$	(12.9	)
Investing activities		67.5			(27.4	)
Financing activities		(2.6	)		7.5
Net (decrease) increase in cash	$	42.7		$	(32.8	)

Net Cash Used in Operating Activities

Net cash used in operating activities of approximately $22.2 million during the six months ended June 30, 2018 was primarily due to our net loss of $24.9 million, an increase in prepaid expense of $2.0 million, amortization of investments of $0.1 million and $0.1 million decrease in accounts payable, partially offset by stock-based compensation expense of $4.0 million and a $0.9 million increase in accrued expenses.

Net cash used in operating activities of approximately $12.9 million during the six months ended June 30, 2017 was primarily due to our net loss of $20.4 million and an increase in accounts payable of $0.1 million, partially offset by a $4.0 million increase in accrued collaborative expense, stock-based compensation expense of $2.5 million, a $0.6 million increase in accrued expenses, an decrease in prepaid expenses of $0.4 million and amortization of investments and debt discount of $0.1 million.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities of approximately $67.5 million during the six months ended June 30, 2018 was primarily due to the maturity and redemption of marketable securities of $75.4 million, partially offset by the purchase of marketable securities of $7.9 million.

Net cash used in investing activities of approximately $27.4 million during the six months ended June 30, 2017 was primarily due to the purchase of marketable securities.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities of $2.6 million during the six months ended June 30, 2018 was due to principal repayments under the Term A loans of $2.6 million.

Net cash provided by financing activities of $7.5 million during the six months ended June 30, 2017 was primarily due to the proceeds from the exercise of common stock warrants of $9.4 million and the proceeds from the exercise of common stock options of $0.6 million, partially offset by the principal repayments under the Term A loans of $2.4 million and $0.1 million for fees paid in connection with the public offering of common stock.

Contractual Obligations and Commitments

As of June 30, 2018, there were no material changes in our contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC on March 12, 2018.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.

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Critical Accounting Policies and Estimates

In our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, our most critical accounting policies and estimates upon which our financial status depends were identified as those relating to stock-based compensation; research and development costs; in-process research and development; goodwill; income taxes; Jumpstart Our Business Startups Act; net operating losses and tax credit carryforwards; and impairment of long-lived assets. We reviewed our policies and determined that those policies remain our most critical accounting policies for the six months ended June 30, 2018.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, and are adopted by us as of the specified effective date. Our significant accounting policies are described in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Form 10-Q. Except as described in Note 2, we believe that the impact of other recently issued accounting pronouncements will not have a material impact on consolidated financial position, results of operations, and cash flows, or do not apply to our operations.

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential loss arising from adverse changes in market rates and market prices such as interest rates, foreign currency exchange rates, and changes in the market value of equity instruments. We do not believe we are currently exposed to any material market risk because the interest rate under our Term A loan is fixed, our exposure for fluctuations in foreign exchange rates is not material and we do not hold equity instruments. As of June 30, 2018, we had $39.8 million of marketable securities, which consisted primarily of corporate bonds, with fixed interest rates. These securities have a weighted-average remaining maturity of 2.5 months. Due to the overall short-term remaining maturities of our marketable securities, our interest rate exposure is not significant. 

Item 4.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We 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 Exchange Act, 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 is recorded, 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 submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate 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 June 30, 2018. Based on the evaluation of our disclosure controls and procedures as of June 30, 2018, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during our latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

Item 1.   Legal Proceedings

From 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 results of litigation and claims cannot be predicted with certainty, as of the date of this Quarterly Report on Form 10-Q, we do not believe we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A.   Risk Factors

We operate in a rapidly changing environment that involves a number of risks which could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I-Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on March 12, 2018. The risk factors set forth below are risk factors containing changes, which may be material, from the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC.

We have incurred significant losses since our inception. We expect to continue to incur losses over the next several years and may never achieve or maintain profitability.

We are a clinical development-stage biopharmaceutical company. In November 2013, we merged with Sonkei Pharmaceuticals, Inc., or Sonkei, and, in February 2014, we acquired Mind-NRG, which were also clinical development-stage biopharmaceutical companies. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval or become commercially viable. As an early stage company, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly the biopharmaceutical area. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations.

We are not profitable and have incurred losses in each period since our inception in 2007. For the six months ended June 30, 2018, and 2017, we reported net losses of $24.9 million and $20.4 million, respectively. As of June 30, 2018, we had an accumulated deficit of $189.3 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 and development of, and seek regulatory approvals for, our product candidates. If any of our product candidates fail in clinical trials or do not gain regulatory approval, or if any of our product candidates, if approved, fail to achieve market acceptance, we may never generate revenue or become profitable. Even if we achieve 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 of future 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 adverse effect 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 not complete 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 and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance our product candidates into clinical trials.

As of June 30, 2018, we had cash, cash equivalents, restricted cash, and marketable securities of $108.6 million. 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 our interim condensed 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 we have based our estimates are routinely evaluated and may be subject to change. The actual amount of our expenditures will vary depending upon a number of

28

factors including but not limited to the design, timing and duration of future clinical trials, the progress of our research and development programs, the infrastructure to support a commercial enterprise, the cost of a commercial product launch and the level of financial 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 product candidates we may develop;

• the outcome, timing and cost of seeking and obtaining regulatory approvals from the EMA, FDA, and comparable foreign regulatory authorities, 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 any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecution, defense and enforcement 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 approval and 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 may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership 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 that restrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. Further, the evolving and volatile global economic climate and global financial market conditions could limit our ability to raise funding and otherwise adversely impact our business or those of our collaborators 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 our business, financial condition and prospects.

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of June 30, 2018, we had twelve full-time employees. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial and other resources. Future growth would impose significant added responsibilities on members 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;

• 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 us and our product candidates.

As our operations expand, we expect that we will need to manage additional relationships with various strategic partners, collaborators, suppliers and other third parties. Our future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our development efforts and clinical trials effectively and hire, train and integrate additional management, administrative and sales and marketing personnel. We may not be able to accomplish these tasks, and our failure to accomplish any of them could prevent us from successfully growing our company.

29

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

We did not sell any unregistered securities during the three months ended June 30, 2018.

Issuer Purchases of Equity Securities

We did not repurchase any securities during the three months ended June 30, 2018.

Item 3.   Defaults upon Senior Securities

Not applicable.

Item 4.   Mine Safety Disclosures

Not applicable.

Item 5.   Other Information

Not applicable.

30

Item 6.   Exhibits

The following exhibits are incorporated by reference or filed as part of this report.

Exhibit
Number	Description	SEC File No.
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s registration statement on Form S-1/A filed with the SEC on June 10, 2014)	333-195169
3.2	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s registration statement on Form S-1/A filed with the SEC on June 10, 2014)	333-195169
10.1†	Amended and Restated 2013 Equity Incentive Plan of the Registrant (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 11, 2018)	001-36517
10.2†	Amended and Restated Non-Employee Director Compensation Plan of the Registrant
31.1	Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1+	Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to Section 906 of Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

† Indicates management contract or compensatory plan or arrangement.

+ These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

31

SIGNATURE

Pursuant 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 its behalf by the undersigned, thereunto duly authorized.

MINERVA NEUROSCIENCES, INC.
By:
	/s/ Geoffrey Race
	Geoffrey Race
	Chief Financial Officer (Principal Financial Officer) (On behalf of the Registrant)

Date: August 2, 2018

32

EX-10.2

EXHIBIT 10.2

AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR COMPENSATION PLAN

Approved: March 7, 2018

Effective: April 1, 2018

Effective as of April 1, 2018, each non-employee member of the board of directors (the “Board”) of Minerva Neurosciences, Inc. (the “Company”) will receive an annual cash retainer of $35,000, the Lead Independent Director will receive an additional cash retainer of $10,000, and the Non-Employee Chairman of the Board will receive an additional annual cash retainer of $50,000. The chairpersons of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive additional annual cash retainers of $15,000, $12,000 and $8,000, respectively. Other members of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive additional annual cash retainers of $7,500, $6,000 and $4,000, respectively. Each newly elected non-employee director will also receive a one-time grant of an option to purchase 40,000 shares of the Company’s common stock promptly following election or appointment to the Board (the “Director Welcome Options”). The Director Welcome Options will vest monthly over three years, provided that the applicable non-employee director is, as of such vesting date, then a director of the Company. In addition, each non-employee director will be granted options to purchase 20,000 shares of the Company’s common stock per year (the “Annual Grants”). The Annual Grants will vest in equal quarterly installments over one year, provided that the applicable non-employee director is, as of such vesting date, then a director of the Company.

Non-employee directors are also reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of the Board or of any committee thereof.

The following is a summary of the terms of this Non-Employee Director Compensation Plan:

Cash

• Annual retainer for Non-employee Chairman of the Board - $85,000

• Annual retainer for Lead Independent Director - $45,000

• Annual retainer per Board member (other than Chairman) - $35,000

• Committee chair annual retainers:

o $15,000 Audit

o $12,000 Compensation

o $ 8,000 Nominating and Governance

• Committee member annual retainers:

o $7,500 Audit

o $6,000 Compensation

o $4,000 Nominating and Governance

• Retainers are paid on a quarterly basis.

Stock Options

• Initial grant per Board member - 40,000 options vesting monthly over 3 years, provided that the applicable non-employee director is, as of such vesting date, then a director of the Company

• Annual grant per Board member - 20,000 options vesting quarterly over 1 year, provided that the applicable non-employee director is, as of such vesting date, then a director of the Company

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Remy Luthringer, certify that:

1. I have reviewed this Form 10-Q 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange 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, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’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 reasonably likely 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 control over financial reporting.

Date: August 2, 2018	/s/ Remy Luthringer Ph.D.
	Remy Luthringer Ph.D.
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Geoffrey Race, certify that:

1. I have reviewed this Form 10-Q 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange 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, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 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 the effectiveness 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 recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’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 reasonably likely 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 control over financial reporting.

Date: August 2, 2018	/s/ Geoffrey Race
	Geoffrey Race
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

STATEMENT PURSUANT TO 18 U.S.C. § 1350

Pursuant 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 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Remy Luthringer, President and Chief Executive Officer (Principal Executive Officer) of Minerva Neurosciences, Inc. (the “Company”) and Geoffrey Race, Chief Financial Officer (Principal Financial Officer) of the Company, each hereby certifies that, to the best of his knowledge:

(1) The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Remy Luthringer, Ph.D.
Date: August 2, 2018	Remy Luthringer, Ph.D.
	President and Chief Executive Officer (Principal Executive Officer)
	/s/ Geoffrey Race
Date: August 2, 2018	Geoffrey Race
	Chief Financial Officer (Principal Financial Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not incorporated by reference into any filing of Minerva Neurosciences, Inc. under the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document Entity Information [Abstract]
Entity Registrant Name	Minerva Neurosciences, Inc.
Entity Central Index Key	0001598646
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	NERV
Entity Common Stock, Shares Outstanding		38,774,343

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 68,688,605	$ 26,051,821
Marketable securities	39,798,752	102,109,419
Restricted cash	100,000	80,000
Prepaid expenses and other current assets	3,229,438	1,299,184
Total current assets	111,816,795	129,540,424
Marketable securities - noncurrent		5,022,982
Equipment, net	42,211	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	160,943,213	183,698,558
Current liabilities
Notes payable	1,396,670	3,962,664
Accounts payable	1,309,843	1,435,636
Accrued expenses and other current liabilities	2,311,462	1,439,848
Total current liabilities	5,017,975	6,838,148
Deferred taxes	4,057,488	4,057,488
Deferred revenue	41,175,600	41,175,600
Other noncurrent liabilities	30,668	29,878
Total liabilities	50,281,731	52,101,114
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock; $0.0001 par value; 100,000,000 shares authorized; none issued or outstanding as of June 30, 2018 and December 31, 2017
Common stock; $0.0001 par value; 125,000,000 shares authorized; 38,749,343 shares issued and outstanding as of June 30, 2018 and December 31, 2017	3,875	3,875
Additional paid-in capital	299,986,819	295,975,010
Accumulated deficit	(189,329,212)	(164,381,441)
Total stockholders’ equity	110,661,482	131,597,444
Total liabilities and stockholders’ equity	$ 160,943,213	$ 183,698,558

XML

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares issued	38,749,343	38,749,343
Common stock, shares outstanding	38,749,343	38,749,343

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Expenses
Research and development	$ 9,062,234	$ 7,144,133	$ 17,511,501	$ 14,758,464
General and administrative	3,872,309	2,601,408	8,166,854	5,472,150
Total expenses	12,934,543	9,745,541	25,678,355	20,230,614
Loss from operations	(12,934,543)	(9,745,541)	(25,678,355)	(20,230,614)
Foreign exchange gains (losses)	29,274	(20,115)	11,165	(36,798)
Investment income	411,542	155,657	825,849	214,319
Interest expense	(35,781)	(170,125)	(106,430)	(371,627)
Net loss	$ (12,529,508)	$ (9,780,124)	$ (24,947,771)	$ (20,424,720)
Net loss per share, basic and diluted	$ (0.32)	$ (0.27)	$ (0.64)	$ (0.57)
Weighted average shares outstanding, basic and diluted	38,749,343	36,719,541	38,749,343	36,048,300

XML

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Balance at Dec. 31, 2016	$ 105,982,208	$ 3,502	$ 238,836,940	$ (132,858,234)
Balance (in shares) at Dec. 31, 2016		35,024,002
Exercise of common stock warrants	9,356,833	$ 162	9,356,671
Exercise of common stock warrants (in shares)		1,621,073
Exercise of stock options	576,174	$ 12	576,162
Exercise of stock options (in shares)		113,928
Stock-based compensation	2,541,584		2,541,584
Net loss	(20,424,720)			(20,424,720)
Balance at Jun. 30, 2017	98,032,079	$ 3,676	251,311,357	(153,282,954)
Balance (in shares) at Jun. 30, 2017		36,759,003
Balance at Dec. 31, 2017	$ 131,597,444	$ 3,875	295,975,010	(164,381,441)
Balance (in shares) at Dec. 31, 2017	38,749,343	38,749,343
Stock-based compensation	$ 4,011,809		4,011,809
Net loss	(24,947,771)			(24,947,771)
Balance at Jun. 30, 2018	$ 110,661,482	$ 3,875	$ 299,986,819	$ (189,329,212)
Balance (in shares) at Jun. 30, 2018	38,749,343	38,749,343

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (24,947,771)	$ (20,424,720)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,734	6,604
Amortization of debt discount recorded as interest expense	36,638	124,130
Accretion of marketable securities	(82,869)	(40,185)
Stock-based compensation expense	4,011,809	2,541,584
Changes in operating assets and liabilities
Prepaid expenses and other current assets	(1,930,254)	406,656
Accounts payable	(125,793)	(60,672)
Accrued expenses and other current liabilities	871,614	459,626
Accrued collaborative expenses		4,098,287
Other noncurrent liabilities	790
Net cash used in operating activities	(22,157,102)	(12,888,690)
Cash flows from investing activities:
Proceeds from the maturity and redemption of marketable securities	75,351,000
Purchase of marketable securities	(7,934,482)	(27,366,415)
Net cash provided by (used in) investing activities	67,416,518	(27,366,415)
Cash flows from financing activities:
Costs paid in connection with public offering		(41,183)
Proceeds from exercise of common stock warrants		9,356,833
Proceeds from exercise of stock options		576,174
Repayments of notes payable	(2,602,632)	(2,425,966)
Net cash (used in) provided by financing activities	(2,602,632)	7,465,858
Net increase (decrease) in cash and cash equivalents	42,656,784	(32,789,247)
Cash, cash equivalents and restricted cash
Beginning of period	26,131,821	82,980,609
End of period	68,788,605	50,191,362
Supplemental disclosure of non-cash financing activities
Deferred public offering costs included in accounts payable or in accrued expenses and other current liabilities		191,797
Supplemental disclosure of cash flow information
Cash paid for interest	85,082	261,749
Reconciliation of the Condensed Consolidated Statements of Cash Flows to the Condensed Consolidated Balance Sheets
Cash and cash equivalents	68,688,605	50,191,362
Restricted cash	100,000	80,000
Total cash, cash equivalents and restricted cash	$ 68,788,605	$ 50,271,362

XML

Nature of Operations and Liquidity

6 Months Ended

Jun. 30, 2018

Nature Of Operations And Liquidity Disclosure [Abstract]

Nature of Operations and Liquidity

NOTE 1 — NATURE OF OPERATIONS AND LIQUIDITY

Nature of Operations

Minerva Neurosciences, Inc. (“Minerva” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patients suffering from central nervous system 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 potentially address the unmet needs of patients with these diseases. The Company’s lead product candidate is roluperidone (also known as MIN-101), a compound the Company 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 major depressive disorder (“MDD”); MIN-117, a compound the Company is developing for the treatment of MDD; and MIN-301, a compound the Company is developing 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 and Mind-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 Company obtained 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 sales outside the Minerva Territory.

Liquidity

The accompanying financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has limited capital resources and has incurred recurring operating losses and negative cash flows from operations since inception. As of June 30, 2018, the Company has an accumulated deficit of approximately $189.3 million and net cash used in operating activities was approximately $22.2 million during the six months ended June 30, 2018. Management expects to continue to incur operating losses and negative cash flows from operations. The Company has financed its operations to date from proceeds from the sale of common stock, warrants, loans and convertible promissory notes.

As of June 30, 2018, the Company had cash, cash equivalents, restricted cash and marketable securities of $108.6 million. The Company believes that its existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months after the date that the interim condensed 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 the Company’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 product launch and the level of financial resources available. The Company has the ability to adjust its operating plan spending levels based on the timing of future clinical 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. The Company 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 is unable to obtain such additional financing, future operations would need to be scaled back or discontinued.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and the requirements of the Securities and Exchange Commission (“SEC”) in accordance with Regulation S-X, Rule 10-01. Under those rules, certain notes and financial information that are normally required for annual financial statements can be condensed or omitted. In the opinion of the Company’s management, the accompanying financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of June 30, 2018, the results of operations for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The consolidated balance sheet as of December 31, 2017 was derived from the audited annual financial statements. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2018.

Consolidation

The accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries, Mind-NRG Sarl and Minerva Neurosciences Securities Corporation.  Intercompany transactions have been eliminated.

Significant risks and uncertainties

The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital.

The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash equivalents include short-term, highly-liquid instruments, consisting of money market accounts and short-term investments with maturities from the date of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand which reduces counterparty performance risk.

Restricted cash

Cash accounts with any type of restriction are classified as restricted. The Company maintained restricted cash balances as collateral for corporate credit cards in the amount of $100 thousand and $80 thousand at June 30, 2018 and December 31, 2017, respectively.

Marketable securities

Marketable securities consists of corporate and U.S. government debt securities maturing in eleven months or less. Based on the Company’s intentions regarding its marketable securities, all marketable securities are classified as held-to-maturity and are carried under the amortized cost approach. The Company’s investments in marketable securities are classified as Level 2 within the fair value hierarchy. As of June 30, 2018, remaining final maturities of marketable securities ranged from July 2018 to February 2019, with a weighted average remaining maturity of approximately 2.5 months. The following 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 June 30, 2018:  

	June 30, 2018
	Amortized		Aggregate		Unrealized			Unrealized		Net Carrying
	Cost		Fair Value		Gains			Losses		Value
Marketable securities:
Corporate bonds/notes	$	26,821,004	$	26,759,574	$	(61,430	)	$	—	$	26,821,004
Commercial paper		2,994,853		2,994,853		—			—		2,994,853
U.S. government agency securities		9,982,895		9,976,900		(5,995	)		—		9,982,895
Marketable securities current total	$	39,798,752	$	39,731,327	$	(67,425	)	$	—	$	39,798,752

Research and development costs

Costs incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technology in the Company’s research and development projects as well as fees paid to consultants and various entities that perform certain research and testing on behalf of the Company and costs related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and development functions. The Company determines expenses related to clinical studies based on estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conduct and manage clinical studies on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Company estimates 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 performance of 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-line basis if the anticipated costs are expected to be incurred ratably during the period. Payments for these activities are based on the terms of the individual arrangements, 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 development

In-process research and development (“IPR&D”) assets represent capitalized incomplete research projects that the Company acquired through business combinations. Such assets are initially measured at their acquisition date fair values. The initial fair value of the research projects are recorded as intangible assets on the balance 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 of research and development efforts associated with the project. An IPR&D asset is considered abandoned when it ceases to be used (that is, research and development 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 that point, the asset is considered to be disposed of and is written off. Upon successful completion of each project, the Company will make a determination about the then remaining useful life of the intangible asset and begin amortization. The Company tests its indefinite-lived intangibles, IPR&D assets, for impairment annually on November 30 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. When testing indefinite-lived intangibles for impairment, the Company may assess qualitative factors for its indefinite-lived intangibles to determine 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 bypass this qualitative assessment for some or all of its indefinite-lived intangibles and perform the quantitative impairment test that compares the fair value of the indefinite-lived intangible asset with the asset’s carrying amount. There was no impairment of IPR&D for the three and six months ended June 30, 2018 or 2017.

Stock-based compensation

The 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 value over the requisite service period of the awards. The Company determines the fair value of stock-based awards using the Black-Scholes option-pricing model which 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”) is equal 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 the equity instrument is reached or the date at which the counterparty’s performance is complete. The Company determines the fair value of stock-based awards granted to non-employees similar to the way fair value of awards are determined for employees except that certain assumptions used in the Black-Scholes option-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 for any change in fair value from the previous valuation until the award vests.

Foreign currency transactions

The Company’s functional currency is the US dollar. The Company pays certain vendor invoices in the respective foreign currency. The Company records an expense in US dollars at the time 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 a foreign currency gain or loss.

Loss per share

Basic 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 per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted 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 the Company’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.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents and marketable securities (current and non-current). 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 financial institutions and monitoring their credit ratings. Marketable securities consist primarily of corporate bonds, with fixed interest rates. Exposure to credit risk of marketable securities is reduced by maintaining a diverse portfolio and monitoring their credit ratings.

Equipment

Equipment 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 assets

The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. If required, the Company compares the estimated undiscounted future net cash flows to the 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-lived assets are recoverable, and no impairment was deemed necessary at June 30, 2018 and 2017.

Goodwill

The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting 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 the Company determines 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 in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. The Company tests its goodwill for impairment as of November 30. There was no impairment of goodwill for the six months ended June 30, 2018 and 2017.

Revenue recognition

The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customer. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured. The Company is a development stage company and has 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, Collaboration Arrangements, the Company recognizes revenue as research and development is performed and its respective share of the expenses are incurred. The Company assesses whether the arrangement contains multiple elements or deliverables, which may include (1) licenses to the Company's technology, (2) research and development activities performed for the collaboration partner, and (3) participation on Joint Steering Committees.  Payments may include non-refundable, upfront payments, milestone payments upon achieving significant development events, and royalties on future sales.  Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; 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 the deliverable was regularly sold by the Company on a stand-alone basis. The consideration allocated to each unit of accounting is then recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Supply or service transactions may involve 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.

Deferred revenue

The Company applies the revenue recognition guidance in accordance with FASB ASC 606, Revenue from Contracts with Customers. Using FASB ASC 606, Revenue that is unearned is deferred. Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is classified as long-term deferred revenue.

Segment information

Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief decision maker, who is the Chief Executive Officer, reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment.

Comprehensive loss

The Company had no items of comprehensive loss other than its net loss for each period presented.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the FASB and are adopted by the Company as of the specified effective date.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Subsequently, the FASB also issued ASU 2015-14,  Revenue from Contracts with Customers (Topic 606) , which adjusted the effective date of ASU 2014-09; ASU No. 2016-08,  Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09; ASU No. 2016-10,  Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which clarifies identifying performance obligation and licensing implementation guidance and illustrations in ASU 2014-09; and ASU No. 2016-12,  Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which addresses implementation issues and is intended to reduce the cost and complexity of applying the new revenue standard in ASU 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 customers and 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), or retrospectively 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 guidance compared 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 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years.  The Company adopted the new standard on January 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 to include amounts described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-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 standard did not have a material impact on the Company’s consolidated financial statements. Cash, cash equivalents, and restricted cash reported on the Consolidated Statements of Cash Flows includes restricted cash of $80 thousand as of December 31, 2016, June 30, 2017, December 31, 2017 and $100 thousand as of June 30, 2018.

Accounting Pronouncements Not Yet Adopted

In 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 a ROU 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 after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Although the Company is currently assessing the impact of adoption of ASU 2016-02 on its consolidated financial statements, the Company currently believes the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on the Company’s balance sheet for operating leases. Refer to Note 9, Commitments and Contingencies, for the Company's current lease commitments.

In January 2017, the FASB issued ASU No. 2017-4, Intangibles — Goodwill and Other (Topic 350). The new standard simplifies the Test for Goodwill Impairment. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-8, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities. The new standard is intended to enhance the accounting for the amortization of premiums for purchased callable debt securities. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’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. The new standard is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. This update expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The new standard supersedes Subtopic 505-50, Equity-Equity-Based payments to Non-Employees. The update is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The adoption of this guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements.

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Accrued Expenses and Other Liabilities

6 Months Ended

Jun. 30, 2018

Payables And Accruals [Abstract]

Accrued Expenses and Other Liabilities

NOTE 3 — ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:  

	June 30, 2018		December 31, 2017
Research and development costs and other accrued expenses	$	1,053,801	$	1,162,441
Accrued bonus		811,867		5,899
Professional fees		372,139		251,000
Interest payable		5,217		20,508
Vacation pay		68,438		—
	$	2,311,462	$	1,439,848

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Net Loss Per Share of Common Stock

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net Loss Per Share of Common Stock

NOTE 4 — NET LOSS PER SHARE OF COMMON STOCK

Diluted 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 the Company’s net loss. Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. The following table sets forth the computation of basic and diluted loss per share for common stockholders:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net loss	$	(12,529,508	)	$	(9,780,124	)	$	(24,947,771	)	$	(20,424,720	)
Weighted average shares of    common stock outstanding		38,749,343			36,719,541			38,749,343			36,048,300
Net loss per share of common    stock – basic and diluted	$	(0.32	)	$	(0.27	)	$	(0.64	)	$	(0.57	)

The following securities outstanding at June 30, 2018 and 2017 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of loss per share is antidilutive:

	June 30,
	2018		2017
Common stock options		6,655,150		3,891,596
Restricted stock units		185,950		194,600
Common stock warrants		40,790		40,790

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

NOTE 5 — DEBT

Loan and Security Agreement

On 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 up to $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 A Loans bear interest at a fixed rate of 7.05% per annum. The Company believes that the Company's debt obligations accrue interest at rates which approximate prevailing market rates for instruments with similar characteristics and, accordingly, the carrying values for these instruments approximate fair value.

In August 2015, the Lenders and the Company entered into a First Amendment to the Loan Agreement, amending certain milestones related to the six month extension of the interest-only repayment period of the Term A Loans.  By raising at least $30.0 million in gross capital (including at least $20.0 million from the sale of equity securities) and completing the first dosing of its Phase 2 clinical trial for MIN-117 prior to December 31, 2015, the Company achieved the interest-only milestones under the Loan Agreement and elected to extend the interest-only period an additional six months and reduce the repayment term by six months. Through August 1, 2016, the Company was obligated only to make monthly interest payments on the outstanding principal balance on the Term A Loans, followed by 24 months of equal principal and interest payments.

On or prior to March 31, 2016, the Company was permitted to borrow additional term loans in the aggregate principal amount up to $5 million, subject to the satisfaction of certain borrowing conditions, including the Company’s achievement of primary endpoints on its Phase 2a trials for MIN-117 and seltorexant programs. In June 2016, the Company irrevocably elected not to borrow the additional $5 million available under the Term Loans.

The Company paid a facility fee at the time of borrowing of $75 thousand for access to the Term Loans and will be required to pay a final payment of 5.1% of the total amount borrowed, which has been included as a component of the debt discount and is amortized to interest expense over the term of the loans. The outstanding Term A Loans and debt discount are as follows:

	June 30, 2018
Term A Loans	$	888,071
Less: debt discount and financing costs		(574	)
Less: current portion		(1,396,670	)
Accrued portion of final payment		509,173
Long-term portion	$	—

For the three months ended June 30, 2018 and 2017, the Company recognized interest expense of $43 thousand and $0.2 million, respectively, including $12 thousand and $0.1 million, respectively, related to the debt discount. For the six months ended June 30, 2018 and 2017, the Company recognized interest expense of $0.1 million and $0.4 million respectively, including $37 thousand and $0.1 million, respectively, related to the debt discount.    

The Term Loans mature on August 1, 2018. The Company may prepay all, but not less than all, of the loaned amount upon 30 days’ advance notice to the Lenders, provided that the Company will be obligated to pay a prepayment fee equal to (i) 3% of the outstanding balance, if the loan is prepaid within 24 months of the funding date, (ii) 2% of the outstanding balance, if the loan is prepaid between 24 and 36 months of the funding date and (iii) 1% of the outstanding balance, if the loan is prepaid thereafter (each, a “Prepayment Fee”).The expected remaining repayment of the $10.0 million Term A Loan principal is $888,071 during 2018.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets, other than its intellectual property. The Company has also agreed not to pledge or otherwise encumber its intellectual property assets, except that it may grant certain exclusive and non-exclusive licenses of its intellectual property as set forth in the Loan Agreement. In addition, the Company pledged all of its equity interests in Minerva Neurosciences Securities Corporation and 65% of its equity interests in Mind-NRG, Sarl as security for its obligations under the Loan Agreement.

Upon the occurrence of certain events, including but not limited to the Company’s failure to satisfy its payment obligations under the Loan Agreement, the breach of certain of its other covenants under the Loan Agreement, or the occurrence of a material adverse change, the Lenders will have the right, among other remedies, to declare all principal and interest immediately due and payable, to take control of the Company’s cash in its SVB deposit account, and will have the right to receive the final payment fee and, if the payment of principal and interest is due prior to maturity, the applicable Prepayment Fee. As of June 30, 2018, the Company was in compliance with all covenants set forth in the Loan Agreement.

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Co-Development and License Agreement

6 Months Ended

Jun. 30, 2018

Co Development And License Agreement Disclosure [Abstract]

Co-Development and License Agreement

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 upon completion 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 patent applications 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), the Company will have rights to manufacture seltorexant, also known as JNJ-42847922. The Company has granted to the licensor an exclusive license, with the right 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 of research and development expense in 2014.

The original Agreement contains certain provisions, which include the Company’s ability to opt-out of the Agreement upon completion of certain milestones.  If the Company elects to participate in the development program through to the potential commercial approval of seltorexant, the Company will pay a quarterly royalty percentage to the licensor in the high single digits on aggregate net sales for seltorexant products sold by the Company, its affiliates and sublicensees in the Minerva Territory. The licensor will pay a quarterly royalty percentage to the Company in the high single digits on aggregate net sales for seltorexant products sold by the licensor outside the Minerva Territory.  In accordance with the development agreement, the Company will pay 40% of seltorexant development costs related to the joint development of any seltorexant products.

The Company’s share of aggregate development costs shall not exceed (i) $5.0 million for the period beginning from the effective date of the license and ending following the completion of certain Phase 1b clinical trials and animal toxicology studies, and (ii) $24.0 million for the period beginning from the effective date of the license and ending following the completion of certain Phase 2 clinical trials.  Janssen has a right to opt out at the end of certain development milestones, after which Janssen will not have to fund further development of seltorexant and the Minerva Territory will be expanded to also include all of North America. The Company would then owe Janssen a reduced royalty in the mid-single digits for all sales in the Minerva Territory. Janssen may also terminate the Agreement for the Company’s material breach or certain insolvency events, including if the Company is unable to fund its portion of the development costs.

The Company accounts for the Agreement as a joint risk-sharing collaboration in accordance with ASC 808, Collaboration Arrangements. Payments between the Company and the licensor with respect to each party’s share of seltorexant development costs that have been incurred pursuant to the joint development plan are recorded within research and development expenses or general and administrative expenses, as applicable, in the accompanying consolidated statements of operations due to the joint risk-sharing nature of the activities. The Company has included zero in accrued collaborative expenses, as of June 30, 2018 and December 31, 2017, related to the Agreement. In the six months ended June 30, 2018 and 2017, the Company paid zero and $2.5 million, respectively, related to development activities under the Agreement.

On July 6, 2016, the Company and Janssen agreed that “Decision Point 2” had been reached as defined under the Agreement. As neither party has exercised their right to withdraw from the Agreement, the Company has paid Janssen $3.5 million and have incurred direct expenses of $0.3 million related to development activities under the current phase of development. During the three months ended June 30, 2018 and 2017, the Company recorded an expense of zero and $3.6 million, respectively, for certain development activities in accordance with the terms of the Agreement. During the six months ended June 30, 2018 and 2017, the Company recorded an expense of zero and $6.6 million, respectively, for certain development activities in accordance with the terms of the Agreement.

In June 2017, the Company entered into an amendment to the Agreement (“the Amendment”). The effectiveness of the Amendment was contingent upon approval of its terms by the European Commission and the closing of the acquisition of Actelion Ltd. by affiliates of Janssen.  These conditions were subsequently met, and the Amendment became effective on August 29, 2017. Under the amended Agreement, Janssen has waived its right to royalties on seltorexant insomnia sales in the Minerva Territory. The Company retains all of its rights to seltorexant, including commercialization of the molecule for the treatment of insomnia and as an as adjunctive therapy for MDD, which include an exclusive license in the Minerva Territory, with royalties payable by the Company to Janssen on seltorexant MDD sales. Royalties on sales outside of the Minerva Territory are payable by Janssen to the Company. Janssen made an upfront payment to the Company of $30 million upon the effectiveness 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 payment when 50% of the patients are enrolled in this trial. Janssen further agreed to waive the remaining payments due from the Company until completion of the Phase 2 development of seltorexant. The $30 million payment and $11.2 million in previously accrued collaborative expenses, which were forgiven upon the effective date of the Amendment, will be earned and recognized as revenue as the services are performed from the commencement of Phase 3 development to the completion of the development activities using the proportional performance method. The $30 million payment along with the $11.2 million in previously accrued collaborative expenses have been included under Deferred Revenue on the Company’s balance sheet at June 30, 2018 and December 31, 2017, respectively. In connection with the Amendment, the Company repurchased all of the approximately 3.9 million shares of its common stock previously owned by 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, the Company assumed strategic control of the clinical development of seltorexant for insomnia and has no further financial obligations until the Phase 2b development milestone has been completed, which is expected to occur in the second half of 2019. Upon completion of this development milestone, referred to as “Decision Point 4”, Minerva has the right to opt-out of the Agreement and collect a royalty on worldwide sales of seltorexant in the single digits with no further obligations to Janssen.  If the Company elects to continue past “Decision Point 4” into Phase 3, the Company would be obligated to fund the clinical trials related to insomnia, and receive $40 million in milestone payments from Janssen, and would also 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 the development activities performed under the Agreement.  The participation in the joint steering committee under the Amendment is considered to be not separable from the development activities and therefore the two deliverables are combined into a single unit of account.  The Company concluded that the milestone payments are solely dependent on future developments and therefore are considered non-substantive and will recognize such revenue in the periods in which the milestones are achieved.  Similarly, the Company will recognize royalty revenues in the periods of the sale of the related products, provided that the reported sales are reliably measurable, collectability is reasonably assured and the Company has no further performance obligations.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Stockholders Equity Note [Abstract]

Stockholders' Equity

NOTE 7 — STOCKHOLDERS’ EQUITY

Public Offering of Common Stock

On 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, for aggregate 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 Act pursuant to a registration statement on Form S-3 (File No. 333-205764) and a related prospectus and prospectus supplement, in each case filed with the Securities and Exchange Commission. The Company incurred $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.  

Share Repurchase

In August 2017, in connection with the Amendment (see Note 6), the Company repurchased all of the approximately 3.9 million shares of its common stock previously owned by Johnson & Johnson Innovation-JJDC Inc. at a per share price of $0.0001, for an aggregate purchase price of approximately $389.

Warrant Exercises

In March 2017, certain investors in the Company’s March 2015 private placement exercised their warrants at an exercise price of $5.772 per share and received an aggregate of 1,621,073 shares of the Company’s common stock. The Company received gross proceeds of approximately $9.4 million from the exercise of these warrants. As of June 30, 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 of the 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 drawn of 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 consecutive trading 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 of common stock at a per share exercise price of $5.516. The warrants are immediately exercisable upon issuance, and other than in connection with certain mergers 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 a Black-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) no dividend 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 and will be amortized to interest expense over the term of the loan. All such warrants were outstanding as of June 30, 2018.  

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Stock Award Plan and Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Award Plan and Stock-Based Compensation

NOTE 8 — STOCK AWARD PLAN AND STOCK-BASED COMPENSATION

In December 2013, the Company adopted the 2013 Equity Incentive Plan (as subsequently amended and restated, the “Plan”), which provides for the issuance of options, stock appreciation rights, stock awards and stock units. On January 1, 2018, in accordance with the terms of the Plan, the total shares authorized 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 shares outstanding calculated as of the end of the most recent fiscal year. The exercise price per share shall not be less than the 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. Further, pursuant to Nasdaq listing rules, the Company issued inducement awards in December 2017 outside of the Plan in the form of an option to purchase 775,000 shares of the Company’s common stock and a restricted stock unit award to purchase 40,000 shares of the Company’s common stock. In June 2018, the Company increased the aggregate number of shares of common stock authorized for issuance under the 2013 Plan by 2,500,000 shares. Stock option activity for employees and non-employees under the Plan for the six months ended June 30, 2018 is as follows:  

	Shares Issuable Pursuant to Stock Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Total Intrinsic Value (in thousands)
Outstanding January 1, 2018		6,132,650		$	6.54	8.4			—
Granted		530,000		$	6.61		—		—
Exercised		—		$	—		—		—
Forfeited		(7,500	)	$	12.35		—		—
Outstanding June 30, 2018		6,655,150		$	6.54		8.0	$	14,281
Exercisable June 30, 2018		2,927,683		$	5.64	6.7		$	6,322
Available for future grant		2,742,654

The weighted average grant-date fair value of stock options outstanding on June 30, 2018 was $4.95 per share. Total unrecognized compensation costs related to non-vested stock options at June 30, 2018 was approximately $16.6 million and is expected to be recognized within future operating results over a weighted-average period of 2.9 years.  The total intrinsic value of the options exercised during the six months ended June 30, 2017 was approximately $0.7 million.

The expected term of the employee-related options was estimated using the “simplified” method as defined by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107, Share-Based Payment. The volatility assumption was determined by examining the historical volatilities for industry peer companies, 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. Treasury instruments whose term was consistent with the expected term of the options. The dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the options.

The Company uses the Black Scholes model to estimate the fair value of stock options granted.  For stock options granted during the six months ended June 30, 2018 and 2017, the Company utilized the following assumptions:

	June 30,
	2018		2017
Expected term (years)	5.5-6.25		5.5-6.25
Risk free interest rate	2.33-2.80%		1.83-2.02%
Volatility	76-83%		79-84%
Dividend yield	0%		0%
Weighted average grant date fair value per share of    common stock	$	4.66	$	6.53

Stock-Based Awards Granted to Non-employees- The Company from time to time grants options to purchase common stock to non-employees for services rendered 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 40,000 stock options to non-employees during the six months ended June 30, 2018. The Company recorded stock-based compensation expense for stock options granted to non-employees of $0.5 million and $0.2 million during the six months ended June 30, 2018 and 2017, respectively.   

For stock options granted to non-employees, the Company utilized the following assumptions:

	June 30,
	2018		2017
Expected term (years)	8.2-9.6		9.2-9.8
Risk free interest rate	2.46-2.84%		2.26-2.30%
Volatility	83-110%		111-113%
Dividend yield	0%		0%
Weighted average reporting date fair value per share of    common stock	$	7.35	$	8.05

RSU activity under the Plan for the six months ended June 30, 2018 is as follows:

			Weighted-Average
			Grant Date
	RSUs		Fair Value
Unvested January 1, 2018		185,950	$	11.86
Granted		—	$	—
Vested		—	$	—
Forfeited		—	$	—
Unvested June 30, 2018		185,950	$	11.86

RSUs awarded to employees generally vest one-fourth per year over four years from the anniversary of the date of grant, provided the employee remains continuously employed with the Company. Shares of the Company’s stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of RSUs is equal to the closing price of the Company’s common stock on the date of grant. Total unrecognized compensation costs related to non-vested RSUs at June 30, 2018 was approximately $1.8 million and is expected to be recognized within future operating results over a period of 2.6 years.

The Company recognized stock-based compensation expense for the six months ended June 30, 2018 and 2017 of $4.0 million and $2.5 million, respectively.  

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 9 — COMMITMENTS AND CONTINGENCIES

On October 2, 2017, the Company entered into an office sublease agreement (the “Sublease”) with Profitect, Inc. (the “Sublandlord”) to sublease approximately 5,923 rentable square feet of office space located at 1601 Trapelo Road, Waltham, MA 02451 (the “Premises”). The term of the Sublease began 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 rate of $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 of the term.

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 business activities. 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 outcome of which, if determined adversely to the Company, would have a material effect on the Company’s financial position or results of operations.

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 10 — RELATED PARTY TRANSACTIONS

In 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’s SomnoArt device for monitoring sleep in the roluperidone Phase 2b and MIN-117 Phase 2a trials. The Company’s Chief Executive Officer is the chairman of the board of directors of V-Watch. Funds affiliated with Index Ventures, a stockholder of the Company, hold greater than 10% of the outstanding capital stock of V-Watch.   

Also refer to Note 6 – Co-Development and License Agreement and Note 7 – Stockholder’s Equity for additional related party transactions.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and the requirements of the Securities and Exchange Commission (“SEC”) in accordance with Regulation S-X, Rule 10-01. Under those rules, certain notes and financial information that are normally required for annual financial statements can be condensed or omitted. In the opinion of the Company’s management, the accompanying financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of June 30, 2018, the results of operations for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The consolidated balance sheet as of December 31, 2017 was derived from the audited annual financial statements. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2018.

Consolidation

Consolidation

The accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries, Mind-NRG Sarl and Minerva Neurosciences Securities Corporation.  Intercompany transactions have been eliminated.

Significant Risks and Uncertainties

Significant risks and uncertainties

The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital.

The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.

Use of Estimates

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents

Cash equivalents include short-term, highly-liquid instruments, consisting of money market accounts and short-term investments with maturities from the date of purchase of 90 days or less. The majority of cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand which reduces counterparty performance risk.

Restricted Cash

Restricted cash

Cash accounts with any type of restriction are classified as restricted. The Company maintained restricted cash balances as collateral for corporate credit cards in the amount of $100 thousand and $80 thousand at June 30, 2018 and December 31, 2017, respectively.

Marketable Securities

Marketable securities

Marketable securities consists of corporate and U.S. government debt securities maturing in eleven months or less. Based on the Company’s intentions regarding its marketable securities, all marketable securities are classified as held-to-maturity and are carried under the amortized cost approach. The Company’s investments in marketable securities are classified as Level 2 within the fair value hierarchy. As of June 30, 2018, remaining final maturities of marketable securities ranged from July 2018 to February 2019, with a weighted average remaining maturity of approximately 2.5 months. The following 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 June 30, 2018:  

	June 30, 2018
	Amortized		Aggregate		Unrealized			Unrealized		Net Carrying
	Cost		Fair Value		Gains			Losses		Value
Marketable securities:
Corporate bonds/notes	$	26,821,004	$	26,759,574	$	(61,430	)	$	—	$	26,821,004
Commercial paper		2,994,853		2,994,853		—			—		2,994,853
U.S. government agency securities		9,982,895		9,976,900		(5,995	)		—		9,982,895
Marketable securities current total	$	39,798,752	$	39,731,327	$	(67,425	)	$	—	$	39,798,752

Research and Development Costs

Research and development costs

Costs incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technology in the Company’s research and development projects as well as fees paid to consultants and various entities that perform certain research and testing on behalf of the Company and costs related to salaries, benefits, bonuses and stock-based compensation granted to employees in research and development functions. The Company determines expenses related to clinical studies based on estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conduct and manage clinical studies on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Company estimates 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 performance of 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-line basis if the anticipated costs are expected to be incurred ratably during the period. Payments for these activities are based on the terms of the individual arrangements, 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 Development

In-process research and development

In-process research and development (“IPR&D”) assets represent capitalized incomplete research projects that the Company acquired through business combinations. Such assets are initially measured at their acquisition date fair values. The initial fair value of the research projects are recorded as intangible assets on the balance 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 of research and development efforts associated with the project. An IPR&D asset is considered abandoned when it ceases to be used (that is, research and development 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 that point, the asset is considered to be disposed of and is written off. Upon successful completion of each project, the Company will make a determination about the then remaining useful life of the intangible asset and begin amortization. The Company tests its indefinite-lived intangibles, IPR&D assets, for impairment annually on November 30 and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. When testing indefinite-lived intangibles for impairment, the Company may assess qualitative factors for its indefinite-lived intangibles to determine 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 bypass this qualitative assessment for some or all of its indefinite-lived intangibles and perform the quantitative impairment test that compares the fair value of the indefinite-lived intangible asset with the asset’s carrying amount. There was no impairment of IPR&D for the three and six months ended June 30, 2018 or 2017.

Stock-Based Compensation

Stock-based compensation

The 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 value over the requisite service period of the awards. The Company determines the fair value of stock-based awards using the Black-Scholes option-pricing model which 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”) is equal 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 the equity instrument is reached or the date at which the counterparty’s performance is complete. The Company determines the fair value of stock-based awards granted to non-employees similar to the way fair value of awards are determined for employees except that certain assumptions used in the Black-Scholes option-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 for any change in fair value from the previous valuation until the award vests.

Foreign Currency Transactions

Foreign currency transactions

The Company’s functional currency is the US dollar. The Company pays certain vendor invoices in the respective foreign currency. The Company records an expense in US dollars at the time 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 a foreign currency gain or loss.

Loss Per Share

Loss per share

Basic 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 per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted 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 the Company’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.

Concentration of Credit Risk

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents and marketable securities (current and non-current). 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 financial institutions and monitoring their credit ratings. Marketable securities consist primarily of corporate bonds, with fixed interest rates. Exposure to credit risk of marketable securities is reduced by maintaining a diverse portfolio and monitoring their credit ratings.

Equipment

Equipment

Equipment 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 Assets

Long-lived assets

The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. If required, the Company compares the estimated undiscounted future net cash flows to the 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-lived assets are recoverable, and no impairment was deemed necessary at June 30, 2018 and 2017.

Goodwill

Goodwill

The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting 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 the Company determines 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 in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. The Company tests its goodwill for impairment as of November 30. There was no impairment of goodwill for the six months ended June 30, 2018 and 2017.

Revenue Recognition

Revenue recognition

The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customer. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured. The Company is a development stage company and has 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, Collaboration Arrangements, the Company recognizes revenue as research and development is performed and its respective share of the expenses are incurred. The Company assesses whether the arrangement contains multiple elements or deliverables, which may include (1) licenses to the Company's technology, (2) research and development activities performed for the collaboration partner, and (3) participation on Joint Steering Committees.  Payments may include non-refundable, upfront payments, milestone payments upon achieving significant development events, and royalties on future sales.  Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; 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 the deliverable was regularly sold by the Company on a stand-alone basis. The consideration allocated to each unit of accounting is then recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Supply or service transactions may involve 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.

Deferred Revenue

Deferred revenue

The Company applies the revenue recognition guidance in accordance with FASB ASC 606, Revenue from Contracts with Customers. Using FASB ASC 606, Revenue that is unearned is deferred. Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is classified as long-term deferred revenue.

Segment Information

Segment information

Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief decision maker, who is the Chief Executive Officer, reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment.

Comprehensive Loss

Comprehensive loss

The Company had no items of comprehensive loss other than its net loss for each period presented.

Recent Accounting Pronouncements

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the FASB and are adopted by the Company as of the specified effective date.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Subsequently, the FASB also issued ASU 2015-14,  Revenue from Contracts with Customers (Topic 606) , which adjusted the effective date of ASU 2014-09; ASU No. 2016-08,  Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09; ASU No. 2016-10,  Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which clarifies identifying performance obligation and licensing implementation guidance and illustrations in ASU 2014-09; and ASU No. 2016-12,  Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which addresses implementation issues and is intended to reduce the cost and complexity of applying the new revenue standard in ASU 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 customers and 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), or retrospectively 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 guidance compared 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 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years.  The Company adopted the new standard on January 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 to include amounts described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-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 standard did not have a material impact on the Company’s consolidated financial statements. Cash, cash equivalents, and restricted cash reported on the Consolidated Statements of Cash Flows includes restricted cash of $80 thousand as of December 31, 2016, June 30, 2017, December 31, 2017 and $100 thousand as of June 30, 2018.

Accounting Pronouncements Not Yet Adopted

In 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 a ROU 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 after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Although the Company is currently assessing the impact of adoption of ASU 2016-02 on its consolidated financial statements, the Company currently believes the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on the Company’s balance sheet for operating leases. Refer to Note 9, Commitments and Contingencies, for the Company's current lease commitments.

In January 2017, the FASB issued ASU No. 2017-4, Intangibles — Goodwill and Other (Topic 350). The new standard simplifies the Test for Goodwill Impairment. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-8, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities. The new standard is intended to enhance the accounting for the amortization of premiums for purchased callable debt securities. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’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. The new standard is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. This update expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The new standard supersedes Subtopic 505-50, Equity-Equity-Based payments to Non-Employees. The update is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The adoption of this guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements.

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Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Amortized Cost Basis, Aggregate Fair Value, Net Unrealized (Gains)/Losses and Net Carrying Value of Investments in Held-to-maturity Securities

The following 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 June 30, 2018:

	June 30, 2018
	Amortized		Aggregate		Unrealized			Unrealized		Net Carrying
	Cost		Fair Value		Gains			Losses		Value
Marketable securities:
Corporate bonds/notes	$	26,821,004	$	26,759,574	$	(61,430	)	$	—	$	26,821,004
Commercial paper		2,994,853		2,994,853		—			—		2,994,853
U.S. government agency securities		9,982,895		9,976,900		(5,995	)		—		9,982,895
Marketable securities current total	$	39,798,752	$	39,731,327	$	(67,425	)	$	—	$	39,798,752

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Accrued Expenses and Other Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Payables And Accruals [Abstract]

Schedule of Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of the following:  

	June 30, 2018		December 31, 2017
Research and development costs and other accrued expenses	$	1,053,801	$	1,162,441
Accrued bonus		811,867		5,899
Professional fees		372,139		251,000
Interest payable		5,217		20,508
Vacation pay		68,438		—
	$	2,311,462	$	1,439,848

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Net Loss Per Share of Common Stock (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Computation of Basic and Diluted Loss Per Share

The following table sets forth the computation of basic and diluted loss per share for common stockholders:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net loss	$	(12,529,508	)	$	(9,780,124	)	$	(24,947,771	)	$	(20,424,720	)
Weighted average shares of    common stock outstanding		38,749,343			36,719,541			38,749,343			36,048,300
Net loss per share of common    stock – basic and diluted	$	(0.32	)	$	(0.27	)	$	(0.64	)	$	(0.57	)

Securities Excluded from Calculation of Weighted Average Shares Outstanding as their Effect is Antidilutive

The following securities outstanding at June 30, 2018 and 2017 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of loss per share is antidilutive:

	June 30,
	2018		2017
Common stock options		6,655,150		3,891,596
Restricted stock units		185,950		194,600
Common stock warrants		40,790		40,790

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Summary of Outstanding Term A Loans and Debt Discount

The outstanding Term A Loans and debt discount are as follows:

	June 30, 2018
Term A Loans	$	888,071
Less: debt discount and financing costs		(574	)
Less: current portion		(1,396,670	)
Accrued portion of final payment		509,173
Long-term portion	$	—

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Stock Award Plan and Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Schedule of Stock Option Activity for Employees and Non-Employees

Stock option activity for employees and non-employees under the Plan for the six months ended June 30, 2018 is as follows:  

	Shares Issuable Pursuant to Stock Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Total Intrinsic Value (in thousands)
Outstanding January 1, 2018		6,132,650		$	6.54	8.4			—
Granted		530,000		$	6.61		—		—
Exercised		—		$	—		—		—
Forfeited		(7,500	)	$	12.35		—		—
Outstanding June 30, 2018		6,655,150		$	6.54		8.0	$	14,281
Exercisable June 30, 2018		2,927,683		$	5.64	6.7		$	6,322
Available for future grant		2,742,654

Summary of Assumptions Used in Black Scholes Model to Estimate Fair Value of Stock Options

The Company uses the Black Scholes model to estimate the fair value of stock options granted.  For stock options granted during the six months ended June 30, 2018 and 2017, the Company utilized the following assumptions:

	June 30,
	2018		2017
Expected term (years)	5.5-6.25		5.5-6.25
Risk free interest rate	2.33-2.80%		1.83-2.02%
Volatility	76-83%		79-84%
Dividend yield	0%		0%
Weighted average grant date fair value per share of    common stock	$	4.66	$	6.53

Schedule of RSU Activity

RSU activity under the Plan for the six months ended June 30, 2018 is as follows:

			Weighted-Average
			Grant Date
	RSUs		Fair Value
Unvested January 1, 2018		185,950	$	11.86
Granted		—	$	—
Vested		—	$	—
Forfeited		—	$	—
Unvested June 30, 2018		185,950	$	11.86

Non-Employees Stock Options

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Assumptions Used in Black Scholes Model to Estimate Fair Value of Stock Options

For stock options granted to non-employees, the Company utilized the following assumptions:

	June 30,
	2018		2017
Expected term (years)	8.2-9.6		9.2-9.8
Risk free interest rate	2.46-2.84%		2.26-2.30%
Volatility	83-110%		111-113%
Dividend yield	0%		0%
Weighted average reporting date fair value per share of    common stock	$	7.35	$	8.05

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NATURE OF OPERATIONS AND LIQUIDITY - Additional Information (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) License	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Nature Of Operations And Liquidity [Line Items]
Accumulated deficit	$ 189,329,212		$ 164,381,441
Net cash used in operating activities	22,157,102	$ 12,888,690
Cash, cash equivalents, restricted cash and marketable securities	$ 108,600,000
Development-stage Proprietary Compounds
Nature Of Operations And Liquidity [Line Items]
Number of licenses acquired | License	4

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SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Segment	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Significant Accounting Policies [Line Items]
Restricted cash balances as collateral for corporate credit cards	$ 100,000	$ 80,000	$ 100,000	$ 80,000	$ 80,000
Marketable securities, weighted average remaining maturity			2 months 15 days
Equipment estimated useful life			3 years
Impairment of Long-Lived Assets			$ 0	0
Impairment of goodwill			0	0
Revenues from product sales to date			$ 0
Number of operating segments | Segment			1
In-Process Research and Development
Significant Accounting Policies [Line Items]
Asset impairment charges	$ 0	$ 0	$ 0	$ 0

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SIGNIFICANT ACCOUNTING POLICIES - Amortized Cost Basis, Aggregate Fair Value, Net Unrealized (Gains)/Losses and Net Carrying Value of Investments in Held-to-maturity Securities (Details)	Jun. 30, 2018 USD ($)
Schedule Of Held To Maturity Securities [Line Items]
Marketable securities, Amortized Cost	$ 39,798,752
Marketable securities, Aggregate Fair Value	39,731,327
Marketable securities, Unrealized Gains	(67,425)
Marketable securities, Net Carrying Value	39,798,752
Corporate Bonds/Notes
Schedule Of Held To Maturity Securities [Line Items]
Marketable securities, Amortized Cost	26,821,004
Marketable securities, Aggregate Fair Value	26,759,574
Marketable securities, Unrealized Gains	(61,430)
Marketable securities, Net Carrying Value	26,821,004
Commercial Paper
Schedule Of Held To Maturity Securities [Line Items]
Marketable securities, Amortized Cost	2,994,853
Marketable securities, Aggregate Fair Value	2,994,853
Marketable securities, Net Carrying Value	2,994,853
U.S. government Agency Securities
Schedule Of Held To Maturity Securities [Line Items]
Marketable securities, Amortized Cost	9,982,895
Marketable securities, Aggregate Fair Value	9,976,900
Marketable securities, Unrealized Gains	(5,995)
Marketable securities, Net Carrying Value	$ 9,982,895

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ACCRUED EXPENSES AND OTHER LIABILITIES - Accrued Expenses and Other Liabilities (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Payables And Accruals [Abstract]
Research and development costs and other accrued expenses	$ 1,053,801	$ 1,162,441
Accrued bonus	811,867	5,899
Professional fees	372,139	251,000
Interest payable	5,217	20,508
Vacation pay	68,438
Accrued expenses and other liabilities	$ 2,311,462	$ 1,439,848

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NET LOSS PER SHARE OF COMMON STOCK - Computation of Basic and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net loss	$ (12,529,508)	$ (9,780,124)	$ (24,947,771)	$ (20,424,720)
Weighted average shares of common stock outstanding	38,749,343	36,719,541	38,749,343	36,048,300
Net loss per share of common stock – basic and diluted	$ (0.32)	$ (0.27)	$ (0.64)	$ (0.57)

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NET LOSS PER SHARE OF COMMON STOCK - Securities Excluded from Calculation of Weighted Average Shares Outstanding as their Effect is Antidilutive (Details) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Common Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Securities outstanding excluded from the calculation of weighted average shares outstanding	6,655,150	3,891,596
Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Securities outstanding excluded from the calculation of weighted average shares outstanding	185,950	194,600
Common Stock Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Securities outstanding excluded from the calculation of weighted average shares outstanding	40,790	40,790

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DEBT - Additional Information (Details)			3 Months Ended		6 Months Ended
	Aug. 31, 2015 USD ($)	Jan. 16, 2015 USD ($) Tranche	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)
Debt Instrument [Line Items]
Amortization of debt discount recorded as interest expense					$ 36,638	$ 124,130
Loan and Security Agreement | Term Loan
Debt Instrument [Line Items]
Aggregate principal amount		$ 15,000,000						$ 5,000,000
Number of tranches | Tranche		2
Additional loan amount not borrowed							$ 5,000,000
Facility fee payment		$ 75,000
Final payment of term loan		5.10%
Amortization of debt discount recorded as interest expense			$ 12,000	$ 100,000	$ 37,000	100,000
Term loans maturity date					Aug. 01, 2018
Advance notice period to the lenders					30 days
Term loan prepayment fee terms					(i) 3% of the outstanding balance, if the loan is prepaid within 24 months of the funding date, (ii) 2% of the outstanding balance, if the loan is prepaid between 24 and 36 months of the funding date and (iii) 1% of the outstanding balance, if the loan is prepaid thereafter (each, a “Prepayment Fee”).
Loan and Security Agreement | Term Loan | Mind-NRG, Sarl
Debt Instrument [Line Items]
Percentage of equity interests			65.00%		65.00%
Loan and Security Agreement | Term Loan | 24 months
Debt Instrument [Line Items]
Proportion of prepayment fees on outstanding balance					3.00%
Loan and Security Agreement | Term Loan | Between 24 and 36 months
Debt Instrument [Line Items]
Proportion of prepayment fees on outstanding balance					2.00%
Loan and Security Agreement | Term Loan | Prepaid Thereafter
Debt Instrument [Line Items]
Proportion of prepayment fees on outstanding balance					1.00%
Loan and Security Agreement | Term Loan | Term A Loans
Debt Instrument [Line Items]
Amount drew dawn during period		$ 10,000,000
Interest rate (as a percent)		7.05%
Minimum capital requirement	$ 30,000,000
Sale of equity securities	$ 20,000,000
Extended interest period for debt instrument					6 months
Reduced repayment period for debt instrument					6 months
Number of installments period					24 months
Interest expense			$ 43,000	$ 200,000	$ 100,000	$ 400,000
Expected remaining repayment during 2018			$ 888,071		$ 888,071

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DEBT - Summary of Outstanding Term A Loans and Debt Discount (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Less: current portion	$ (1,396,670)	$ (3,962,664)
Term Loan | Term A Loans
Debt Instrument [Line Items]
Term A Loans	888,071
Less: debt discount and financing costs	(574)
Less: current portion	(1,396,670)
Accrued portion of final payment	$ 509,173

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CO-DEVELOPMENT AND LICENSE AGREEMENT - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions					1 Months Ended	3 Months Ended		6 Months Ended
	Aug. 29, 2017	Jul. 06, 2016	Jul. 07, 2014	Feb. 13, 2014	Aug. 31, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Co-development and license agreement
Research and development expense						$ 9,062,234	$ 7,144,133	$ 17,511,501	$ 14,758,464
Deferred revenue						41,175,600		$ 41,175,600		$ 41,175,600
Phase 3 Insomnia Trail
Co-development and license agreement
Percentage of milestone payment on aggregate product development cost								40.00%
Seltorexant | Co-Development and License Agreement | Phase 1b Clinical Trials | Maximum
Co-development and license agreement
Share of aggregate development cost following completion of Phase 1b clinical trials and animal toxicology studies				$ 5,000,000
Seltorexant | Co-Development and License Agreement | Phase 2 Clinical Trials | Maximum
Co-development and license agreement
Share of aggregate development cost following completion of Phase 1b clinical trials and animal toxicology studies				$ 24,000,000
Janssen | Phase 3 Insomnia Trail
Co-development and license agreement
Milestone method payments								$ 40,000,000
Janssen | Seltorexant | Co-Development and License Agreement
Co-development and license agreement
Payment of license fee			$ 22,000,000
Percentage of development costs related to joint development of products				40.00%
Accrued collaborative expenses						0		0		0
Payment of development costs		$ 3,500,000						0	2,500,000
Direct expenses incurred		$ 300,000
Research and development expense						0	$ 3,600,000	$ 0	$ 6,600,000
Janssen | Seltorexant | Amendment to Co-Development and License Agreement
Co-development and license agreement
Accrued collaborative expenses	$ 11,200,000
Upfront payment	30,000,000
Revenue recognition, milestone method, factors								The $30 million payment and $11.2 million in previously accrued collaborative expenses, which were forgiven upon the effective date of the Amendment, will be earned and recognized as revenue as the services are performed from the commencement of Phase 3 development to the completion of the development activities using the proportional performance method.
Janssen | Seltorexant | Amendment to Co-Development and License Agreement | Upfront Payment
Co-development and license agreement
Deferred revenue						30,000,000		$ 30,000,000		30,000,000
Janssen | Seltorexant | Amendment to Co-Development and License Agreement | Previously Accrued Collaborative Expenses
Co-development and license agreement
Deferred revenue						$ 11,200,000		$ 11,200,000		$ 11,200,000
Janssen | Seltorexant | Amendment to Co-Development and License Agreement | Phase 3 Insomnia Trail
Co-development and license agreement
Payment start of Phase	20,000,000
Payment upon enrollment of patients	$ 20,000,000
Percentage of patients to be enrolled	50.00%
Johnson & Johnson Innovation-JJDC Inc
Co-development and license agreement
Stock repurchased	3.9				3.9
Stock repurchased price per share	$ 0.0001				$ 0.0001
Aggregate purchase price	$ 389				$ 389

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STOCKHOLDERS' EQUITY - Public Offering of Common Stock - Additional Information (Details) - USD ($)		6 Months Ended
	Jul. 05, 2017	Jun. 30, 2017
Class Of Stock [Line Items]
Underwriting discounts and commissions and transaction costs		$ 41,183
Public Offering
Class Of Stock [Line Items]
Shares of common stock issued	5,750,000
Share price (in dollars per share)	$ 7.75
Proceeds from sale of common stock in public offering	$ 44,600,000
Underwriting discounts and commissions and transaction costs	3,000,000
Net proceeds from issuance of common stock	$ 41,600,000
Exercise of Underwriters
Class Of Stock [Line Items]
Shares of common stock issued	750,000

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STOCKHOLDERS' EQUITY - Share Repurchase - Additional Information (Details) - Johnson & Johnson Innovation-JJDC Inc - USD ($) $ / shares in Units, shares in Millions		1 Months Ended
	Aug. 29, 2017	Aug. 31, 2017
Class Of Stock [Line Items]
Stock repurchased	3.9	3.9
Stock repurchased price per share	$ 0.0001	$ 0.0001
Aggregate purchase price	$ 389	$ 389

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STOCKHOLDERS' EQUITY - Warrants Exercises - Additional Information (Details) - USD ($)	1 Months Ended	6 Months Ended
	Mar. 31, 2017	Jun. 30, 2017	Jun. 30, 2018
Class Of Warrant Or Right [Line Items]
Proceeds from exercise of warrants		$ 9,356,833
Private Placement | Warrants
Class Of Warrant Or Right [Line Items]
Common stock exercise price per share	$ 5.772
Shares of common stock to purchase by warrant	1,621,073
Proceeds from exercise of warrants	$ 9,400,000
Warrants outstanding			0

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STOCKHOLDERS' EQUITY - Term Loan Warrants - Additional Information (Details) $ / shares in Units, $ in Millions	Jan. 16, 2015 USD ($) TradingDay $ / shares shares
Class Of Warrant Or Right [Line Items]
Fair value of warrants estimated | $	$ 0.2
Warrant
Class Of Warrant Or Right [Line Items]
Expiration anniversary date of issuance	10 years
Warrant | Valuation Technique, Option Pricing Model | Measurement Input, Price Volatility
Class Of Warrant Or Right [Line Items]
Alternative investment, measurement input	100.8
Warrant | Valuation Technique, Option Pricing Model | Measurement Input, Risk Free Interest Rate
Class Of Warrant Or Right [Line Items]
Alternative investment, measurement input	1.83
Warrant | Valuation Technique, Option Pricing Model | Measurement Input, Expected Term
Class Of Warrant Or Right [Line Items]
Expected life	10 years
Warrant | Valuation Technique, Option Pricing Model | Measurement Input, Expected Dividend Payment
Class Of Warrant Or Right [Line Items]
Expected dividend	$ 0
Term Loan
Class Of Warrant Or Right [Line Items]
Aggregate number of shares of Common Stock issuable	2.25%
Consecutive trading days | TradingDay	10
Term Loan | Term A Loans
Class Of Warrant Or Right [Line Items]
Shares of common stock to purchase by warrant | shares	40,790
Common stock exercise price per share	$ 5.516

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STOCK AWARD PLAN AND STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	6 Months Ended		12 Months Ended
	Jan. 01, 2018	Dec. 31, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Stock Award Plan and Stock-Based Compensation
Fair value of common stock on grant date (in dollars per share)			$ 4.95
Total intrinsic value of the stock options exercised			$ 0.7
Dividend yield (as a percent)			0.00%
Stock-based compensation expense			$ 4.0	$ 2.5
Employee Stock Option
Stock Award Plan and Stock-Based Compensation
Total unrecognized compensation costs			$ 16.6
Weighted-average period over which unrecognized compensation costs is expected to be recognized			2 years 10 months 24 days
RSUs
Stock Award Plan and Stock-Based Compensation
Total unrecognized compensation costs			$ 1.8
Weighted-average period over which unrecognized compensation costs is expected to be recognized			2 years 7 months 6 days
Vesting rights percentage			25.00%
Vesting period			4 years
Description of vesting rights			RSUs awarded to employees generally vest one-fourth per year over four years from the anniversary of the date of grant
Non-Employees Stock Options
Stock Award Plan and Stock-Based Compensation
Shares issued			40,000
Stock-based compensation expense			$ 0.5	$ 0.2
2013 Equity Incentive Plan
Stock Award Plan and Stock-Based Compensation
Increase in number of shares authorized for issuance					750,000
Shares authorized for issuance under the plan	6,531,333
Additional shares authorized for issuance under the plan as percentage of total shares outstanding			4.00%
2013 Equity Incentive Plan | Common Stock
Stock Award Plan and Stock-Based Compensation
Increase in number of shares authorized for issuance			2,500,000
2013 Equity Incentive Plan | Employee Stock Option | Common Stock
Stock Award Plan and Stock-Based Compensation
Shares issued		775,000
2013 Equity Incentive Plan | RSUs | Common Stock
Stock Award Plan and Stock-Based Compensation
Shares issued		40,000
Maximum | 2013 Equity Incentive Plan | Employee Stock Option
Stock Award Plan and Stock-Based Compensation
Term of share-based award	10 years
Minimum | Employee Stock Option
Stock Award Plan and Stock-Based Compensation
Fair value of common stock on grant date (in dollars per share)			$ 4.66	$ 6.53
Dividend yield (as a percent)			0.00%	0.00%
Minimum | Non-Employees Stock Options
Stock Award Plan and Stock-Based Compensation
Dividend yield (as a percent)			0.00%	0.00%

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STOCK AWARD PLAN AND STOCK-BASED COMPENSATION - Stock Option Activity for Employees and Non-Employees (Details) - Employees and Non-Employees Stock Option - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Shares Issuable Pursuant to Stock Options
Outstanding at the beginning of period (in shares)	6,132,650
Granted (in shares)	530,000
Forfeited (in shares)	(7,500)
Outstanding at the end of the period (in shares)	6,655,150	6,132,650
Exercisable at the end of the period (in shares)	2,927,683
Available for future grant (in shares)	2,742,654
Weighted-Average Exercise Price
Outstanding at the beginning of period (in dollars per share)	$ 6.54
Granted (in dollars per share)	6.61
Forfeited (in dollars per share)	12.35
Outstanding at the end of the period (in dollars per share)	6.54	$ 6.54
Exercisable at the end of the period (in dollars per share)	$ 5.64
Weighted-Average Remaining Contractual Term Outstanding (years)	8 years	8 years 4 months 24 days
Weighted-Average Remaining Contractual Term Exercisable (years)	6 years 8 months 12 days
Total Intrinsic Value Outstanding	$ 14,281
Total Intrinsic Value Exercisable	$ 6,322

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STOCK AWARD PLAN AND STOCK-BASED COMPENSATION - Summary of Assumptions Used in Black Scholes Model to Estimate Fair Value of Stock Options (Details) - $ / shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Stock Award Plan and Stock-Based Compensation
Dividend yield	0.00%
Weighted average grant date fair value per share of common stock	$ 4.95
Employee Stock Option | Minimum
Stock Award Plan and Stock-Based Compensation
Expected term (years)	5 years 6 months	5 years 6 months
Risk free interest rate	2.33%	1.83%
Volatility	76.00%	79.00%
Dividend yield	0.00%	0.00%
Weighted average grant date fair value per share of common stock	$ 4.66	$ 6.53
Employee Stock Option | Maximum
Stock Award Plan and Stock-Based Compensation
Expected term (years)	6 years 3 months	6 years 3 months
Risk free interest rate	2.80%	2.02%
Volatility	83.00%	84.00%
Non-Employees Stock Options | Minimum
Stock Award Plan and Stock-Based Compensation
Expected term (years)	8 years 2 months 12 days	9 years 2 months 12 days
Risk free interest rate	2.46%	2.26%
Volatility	83.00%	111.00%
Dividend yield	0.00%	0.00%
Weighted average reporting date fair value per share of common stock	$ 7.35	$ 8.05
Non-Employees Stock Options | Maximum
Stock Award Plan and Stock-Based Compensation
Expected term (years)	9 years 7 months 6 days	9 years 9 months 18 days
Risk free interest rate	2.84%	2.30%
Volatility	110.00%	113.00%

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STOCK OPTION PLAN AND STOCK-BASED COMPENSATION - Schedule of RSU Activity (Details) - RSUs	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Stock Options
Unvested at the beginning of the period (in shares) | shares	185,950
Granted (in shares) | shares
Vested (in shares) | shares
Forfeited (in shares) | shares
Unvested at the end of the period (in shares) | shares	185,950
Weighted-Average Grant Date Fair Value
Unvested, Weighted-Average Grant Date Fair Value | $ / shares	$ 11.86
Granted (in dollars per share) | $ / shares
Vested (in dollars per share) | $ / shares
Forfeited (in dollars per share) | $ / shares
Unvested, Weighted-Average Grant Date Fair Value | $ / shares	$ 11.86

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COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - Office Sublease Agreement - Profitect, Inc		6 Months Ended
	Oct. 02, 2017 USD ($) ft²	Jun. 30, 2018
Loss Contingencies [Line Items]
Sublease rentable square feet | ft²	5,923
Lease description		The term of the Sublease began 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 rate of $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 of the term.
Lease commencement date	Nov. 01, 2017
Sublease expire date	Jul. 30, 2021
Minimum
Loss Contingencies [Line Items]
Monthly rental rate	$ 14,808
Maximum
Loss Contingencies [Line Items]
Monthly rental rate	$ 16,288

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RELATED PARTY TRANSACTIONS - Additional Information (Details) - V - Watch SA $ in Thousands	1 Months Ended
	Jan. 31, 2016 USD ($)
Related Party Transaction [Line Items]
Services agreement	$ 105
Minimum
Related Party Transaction [Line Items]
Percentage of outstanding capital stock	10.00%