A small company with big potential
MediciNova Inc (NASDAQ:MNOV) has five Phase II clinical trials ongoing in progressive multiple sclerosis (MS), Lou Gehrig’s Disease (ALS) and addiction. Its lead programme, MN-166 in Phase IIb for progressive MS, has shown a statistically significant improvement on neurodegenerative endpoints (including brain volume loss) and has an extensive safety database.
MN-166, a potential blockbuster for progressive MS
MN-166 has been on the market in Japan for 25 years with a safety database of 3.2 million patients. In a Phase II trial in relapsing-remitting multiple sclerosis (RRMS), MN-166 had a statistically significant reduction in brain volume loss (p=0.035) and conversion of acute lesions into persistent black holes (a sign of irreversible demyelination and axonal loss) (p=0.004). However, it missed the primary endpoint in that trial (number of new active lesions), which may indicate that it will work better in the more neurodegenerative types of MS than inflammatory (RRMS).
Progressive MS, a major unmet medical need
PPMS and SPMS are major unmet medical needs. The only drug approved for either indication is Novantrone, a chemotherapeutic, for the treatment of SPMS though its cumulative dosing is limited due to cardiotoxicity. PPMS and SPMS have the potential to be as big a market as RRMS ($18bn+ in 2014), as 90% of those with RRMS eventually progress to SPMS over 20-25 years.
The rest of the pipeline is not to be ignored
MN-166 is also in Phase II for addiction, where it demonstrated statistically significant reductions in certain symptoms (eg craving, perspiration, hot flashes) in previous trials, as well as ALS. MN-001, which has anti-fibrotic and anti-inflammatory properties, has had Phase II protocols for NASH and IPF approved by the FDA and there will be an update on these programmes later this year.
Valuation: EV ~$70m
The current valuation is supported by the pipeline, which has multiple shots on goal and a potential blockbuster in MN-166 for progressive forms of MS. MediciNova has $11.7m in cash, which should fund it for over a year (it is been burning ~$9m pa). Upcoming near-term catalysts could be MS and ALS data presentations at the American Academy of Neurology (AAN) on 21-23 April. Other major catalysts (ALS data in 2016 and MS data in 2017) could provide considerable upside, if positive.
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