Shares in Minerva Neurosciences Inc. (NERV) tanked 72% after the company's experimental drug roluperidone tailored for the treatment of schizophrenia did not meet its primary and key secondary endpoints in a Phase 3 trial.
The stock sank 72% to $3.71 on Friday. The clinical-stage biotech company said the trial conducted among 513 patients did not demonstrate “statistically significant difference from the placebo” in narrowing disease symptoms at week 12 of the treatment. However, the study did show that the roluperidone experimental drug was generally well tolerated, the company said.
“Even though this study didn’t achieve its primary and key secondary endpoints, primarily due to a larger than expected placebo effect at Week 12, results obtained with the 64 mg dose including the early onset of effect and functional improvement as measured by PSP suggest roluperidone merits continued investigation for the treatment of primary negative symptoms,” said Remy Luthringer, Executive Chairman and CEO of Minerva. “We intend to consult with the US FDA about the next steps in the development of roluperidone for this indication after we complete the analysis of the study data.”
Roluperidone is being developed as a treatment for the negative symptoms of schizophrenia that can persist chronically throughout patients’ lifetimes and contribute to poor quality of life and functional outcomes. The experimental drug has in the past been shown to potentially block serotonin receptors and sigma receptors, two receptors in the brain that are involved in the regulation of mood, cognition, sleep and anxiety.
In reaction to the announcement, five-star analysts Myles Minter at William Blair and Biren Amin at Jefferies on Friday both cut Minerva's stock to Hold from Buy. Amin, who has a $2 price target on the stock does not believe the FDA will consider benefit on a secondary endpoint when a study fails on a primary endpoint, leaving an unclear path for the drug.
The rest of Wall Street analysts have 3 Buy ratings on the stock adding up to a Moderate Buy consensus. The $15.75 average analyst price target now implies a staggering 325% upside potential in the shares in the coming 12 months. (See Minerva stock analysis on TipRanks).
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