By David Bautz, PhD

NASDAQ:MNOV

READ THE FULL MNOV RESEARCH REPORT

Business Update

SARS-CoV-2 Vaccine Induces Neutralizing Antibodies in Mice

On September 23, 2020, MediciNova, Inc. (NASDAQ:MNOV) announced that the company’s SARS-CoV-2 vaccine for COVID-19 elicited serum IgG and mucosal IgA neutralizing antibodies against the S1 antigen of SARS-CoV-2 in mice following intranasal vaccination. The vaccine is being developed through a joint development agreement with BioComo and Mie University. It uses BC-PIV, a human parainfluenza virus (HPIV) type 2 vector, which is a non-transmissible viral vector with a strong safety profile. Please see our previous report for background on the HPIV vector.

Now that the company has confirmed the ability of the vaccine to induce neutralizing antibodies, additional preclinical studies are currently underway to evaluate cell mediated immunity (CD4/CD8+ T cells) and the vaccine’s efficacy in preventing viral infection in an in vivo study. We anticipate additional updates on the progress of the vaccine candidate over the next several months.

MN-166 in CIPN

On September 24, 2020, MediciNova announced a publication in Cancer Chemotherapy and Pharmacology regarding positive findings from a clinical study of MN-166 in patients with chemotherapy-induced peripheral neuropathy (CIPN) (Teng et al., 2020). It was a prospective, open label, sequential crossover study in patients with metastatic upper gastrointestinal or colorectal cancer to determine whether MN-166 could reduce acute peripheral neuropathy symptoms. A total of 16 patients consented, with 14 patients completing two cycles of oxaliplatin-containing chemotherapy. In Cycle A, patients received conventional chemotherapy while in Cycle B patients received chemotherapy with concurrent MN-166. With the crossover design, each patient served as their own control. Neurotoxicity was assessed using the Oxaliplatin-Specific Neurotoxicity Scale (OSNS), the Total Neuropathy Score Clinical (TNSc), the Functional Assessment of Cancer Therapy/Gynaecologic Oncology Group – Neurotoxicity (FACT/GOG-Ntx13), and the National Cancer Institute Common Terminology Criteria for Adverse Events (NCI-CTCAE) neuropathy subscale.

The study showed that a majority of patients experienced either an improvement or no worsening of neurotoxicity with MN-166 treatment. For the OSNS scale, 12/14 (86%) patients reported acute neurotoxicity (Grade 1 or 2) in both cycles. Of those, 10/12 (83%) were unchanged with two patients reporting improved symptoms from Grade 2 to Grade 1 with MN-166 treatment. For the other three scales, a majority of participants had no worsening of scores at Day 3 and end of cycle time-points for Cycle B compared to Cycle A. The following figure shows that only one patient had an increase in total neuropathy score, while 13 patients showed no change or a decrease in total neuropathy score.

Importantly, there was no change in systemic exposure of oxaliplatin or 5-fluorouracil when administered along with MN-166, suggesting that MN-166 did not alter the pharmacokinetics of either chemotherapeutic agent.

Alleviating the severity of acute neurotoxicity and neuropathy symptoms is very important to cancer patients as these symptoms can result in dose reductions or stopping of the chemotherapy, which could have a significant negative impact on survival time. There are no pharmaceuticals currently approved for CIPN.

To follow up on these positive findings, MediciNova is planning to initiate a Phase 2b clinical trial of MN-166 in CIPN in collaboration with the University of Sydney and the Australasian Gastro-Intestinal Trials Group (AGITG). It will be a multicenter, randomized, double blind, placebo-controlled trial to determine if MN-166 (60 mg/day) can decrease acute neurotoxicity symptoms and CIPN in patients with metastatic colorectal cancer receiving oxaliplatin for up to six months. A total of 100 patients are planned to be enrolled in a 1:1 (MN-166:placebo) ratio. Trial expenses will be paid by the AGITG with MediciNova responsible for supplying drug product.

Financial Update

On October 26, 2020, MediciNova filed form 10-Q with financial results for the third quarter of 2020. As expected, the company did not report any revenues for the third quarter of 2020. Net loss for the third quarter of 2020 was $3.7 million, or $0.08 per share, compared to a net loss of $2.4 million, or $0.05 per share for the third quarter of 2019. R&D expenses for the third quarter of 2020 were $2.2 million, compared to $1.2 million for the third quarter of 2019. The increase was primarily due to higher clinical trial expenses. G&A expenses for the third quarters of 2020 and 2019 were $1.5 million.

Total operating cash burn for the third quarter of 2020 was approximately $3.9 million and the company exited the third quarter of 2020 with approximately $61.6 million in cash and cash equivalents. As of October 22, 2020, the company had approximately 44.9 million shares outstanding and, when factoring in the approximately 7.5 million stock options, a fully diluted share count of approximately 52.4 million.

Conclusion

The news regarding MediciNova’s SARS-CoV-2 vaccine candidate continues to be encouraging, particularly its ability to elicit both IgG and IgA neutralizing antibodies. The vaccine candidate is an exciting development for the company, as there are very few intranasally administered COVID-19 vaccines in development and there are a number of potential advantages for a vaccine that can be administered intranasally, most notably the potential for only needing a single dose. We estimate that a successful COVID-19 vaccine (we believe there will be multiple vaccines that will eventually be approved) could generate revenues of $1 billion in a relatively short time frame, however how much revenue a vaccine generates long term is unknown given our lack of understanding regarding the longevity of the immune response to SARS-CoV-2 and if booster shots will be necessary for some vaccines. This will be a highly fluid situation as we learn more about other vaccines in development and the response to those vaccines, but for now we value the COVID-19 vaccine program for MediciNova at $100 million.

In addition to work on the vaccine and MN-166 in CIPN, we remind investors that MN-166 is also currently being evaluated in a Phase 3 clinical trial in patients with amyotrophic lateral sclerosis (ALS), a Phase 3 trial for degenerative cervical myelopathy (DCM), and is Phase 3 ready for multiple sclerosis (MS). Our current valuation is $26.50.

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