On Wednesday, Truist Securities adjusted its outlook on Marinus (NASDAQ:MRNS) Pharmaceuticals (NASDAQ:MRNS), reducing the price target to $10 from the previous $25 while maintaining a Buy rating. The firm's reassessment follows a recalibration of the potential success and market penetration estimates for ganaxolone, Marinus's lead drug candidate.
The revised estimates by Truist Securities reflect a more conservative forecast for ganaxolone's success in various indications. The probability of success (POS) for ganaxolone in refractory status epilepticus (RSE) has been adjusted to 20% from an earlier estimate of 75%.
Similarly, the POS for the treatment in tuberous sclerosis complex (TSC) is now set at 35%, down from the previous 65%. The expectations for Tenacia milestones have also been scaled back to 20% from 85%.
The firm anticipates a slower uptake of ganaxolone in TSC and CDKL5 deficiency disorder (CDD), leading to a reduction in peak sales projections. The peak sales estimate for TSC is now just shy of $800 million by 2038, a significant decrease from the previously projected $1.5 billion.
For CDD, peak penetration is now expected to reach 34%, with peak sales forecasted at $250 million, down from the earlier $330 million estimate.
In addition to the changes in ganaxolone's outlook, Truist Securities has incorporated preliminary sales guidance for Ztalmy into its model. This has led to a slight adjustment in the firm's earnings per share (EPS) estimates for Marinus.
The first quarter 2024 EPS estimate has been modified to -$0.64 from -$0.65, and the full-year 2024 EPS forecast has been updated to -$2.20. These revisions take into account adjusted assumptions regarding share count dilution.
InvestingPro Insights
As Marinus Pharmaceuticals (NASDAQ:MRNS) navigates the challenges of bringing ganaxolone to market, investors may find it useful to consider the company's financial health and market performance. According to InvestingPro, Marinus holds more cash than debt on its balance sheet, which could provide some financial flexibility in the near term.
Still, the company is also quickly burning through cash, a situation reflected in the significant negative gross profit margin of -226.96% over the last twelve months as of Q1 2023. This underlines the importance of efficient capital management for the company moving forward.
On the market side, Marinus is trading near its 52-week low, which may indicate a potential entry point for investors who believe in the long-term prospects of the company. The Price / Book ratio stands at a high 26.86, suggesting that the stock is quite expensive relative to the company's book value.
Furthermore, Marinus does not pay a dividend, which means that investors are likely looking for capital gains as opposed to income from their investment in the company.
For those considering an investment in Marinus Pharmaceuticals, there are additional InvestingPro Tips available that provide further insights into the company's financials and market performance. With the use of coupon code PRONEWS24, investors can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable tips.
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