On Thursday, H.C. Wainwright adjusted its price target for Minerva Neurosciences (NASDAQ:NERV) to $7.00 from the previous $11.00, while keeping a Neutral rating on the stock. The revision follows Minerva's first-quarter results announcement on Wednesday and stems from a Complete Response Letter (CRL) the company received from the FDA in February.
The CRL highlighted deficiencies in the New Drug Application (NDA) for roluperidone, Minerva's proposed treatment for negative symptoms of schizophrenia. Specifically, the FDA stated the NDA lacked sufficient data to prove the effectiveness of roluperidone, both as a standalone treatment and when used alongside other antipsychotic medications. It also pointed out the need for more data to support the safety profile of a 64mg dose over a minimum of 12 months.
The regulatory body has requested Minerva to conduct an additional study to substantiate the safety and effectiveness of the drug.
In response to the FDA's requirements, Minerva recently finalized a Phase 1b clinical trial that assessed the safety and pharmacokinetics/pharmacodynamics (PK/PD) of roluperidone in combination with olanzapine, another antipsychotic, in patients with moderate-to-severe negative symptoms of schizophrenia.
The trial involved patients receiving at least one dose of roluperidone at 64mg, and no new safety concerns were reported after 17 days of daily dosing. The study also indicated no significant pharmacokinetic interactions between roluperidone and olanzapine.
Despite these findings, it remains uncertain whether the Phase 1b study will satisfy the FDA's concerns regarding the co-administration of roluperidone with other antipsychotics. H.C. Wainwright expressed confidence in the drug's efficacy and profile but awaits further clarity from Minerva's management on how they plan to address the FDA's feedback.
The firm's reduced price target reflects the current uncertainty and the potential financial implications for Minerva, including the possibility of needing to secure additional funding to complete the required studies.
InvestingPro Insights
Minerva Neurosciences (NASDAQ:NERV) has been navigating through turbulent waters, and the latest metrics from InvestingPro provide a snapshot of the company's current financial health. With a market capitalization of just $16.78 million and a negative price-to-earnings (P/E) ratio of -0.51, Minerva's financial position reflects the challenges it faces. The company's gross profit for the last twelve months as of Q1 2024 stands at a negative $12.71 million, and its operating income is also in the red, with an adjusted figure of -$24.45 million. These numbers underscore the difficulties Minerva has in generating profit from its operations.
InvestingPro Tips indicate that Minerva's stock trades with high price volatility and is currently trading near its 52-week low. The company's liquid assets exceed short-term obligations, which may provide some financial flexibility in the short term. However, analysts are not optimistic about profitability in the near future, as Minerva has not been profitable over the last twelve months. The company's stock price has suffered significantly, with a 74.58% decline over the last three months, and it has taken a substantial hit over the last six months as well. It's also worth noting that Minerva does not pay a dividend to shareholders, which could influence investment decisions.
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