Thursday, September 26, 2019

IBI Reports On Marinus: Robust Phase 2 Data For Ganoxolone

Summary
Marinus Pharmaceutical reported stellar data for its Phase 2 trial investigating the lead medicine (ganoxolone) for refractory status epilepticus.
All trial patients experienced strong efficacy with an overall good safety profile.
The shares exhibited a strong initial rally. As investors take profits, the initial optimism is fizzling out.
Marinus Pharmaceuticals (MRNS) made its way into IBI's daily commentary today. Due to the positive Phase 2 study of its lead medicine ganaxolone, the stock appreciated over 58% in the pre-market. Nonetheless, the rally is fizzling out toward mid-day trading. It seems that market optimism is fading, as Marinus is currently exchanging hands at 18% premium to yesterday's close.
Figure 1: Marinus chart (Source: StockCharts)
Accordingly, Marinus is focused on the innovation and commercialization of novel molecules to serve the unmet needs in epilepsy and psychiatric medicine. Instead of diversifying into a broad pipeline, Marinus is brewing one stellar molecule (ganaxolone) for various neurological indications, including refractory pediatric epilepsy, acute epilepsy, and postpartum depression.
In the open-label, dose-finding, Phase 2 study of intravenous (IV) ganaxolone in patients with refractory status epilepticus, i.e. resistant seizures, ganaxolone met its primary endpoint with statistical significance. Specifically, all 17 patients stopped their seizure rather than needing stronger medicine (i.e. IV anesthetic) within 24 hours. Overall, ganaxolone demonstrated an overall favorable safety profile. Of note, I'm not surprised by the study results because of the drug's excellent mechanism of action. I elucidated in the prior research,
At the heart of ganaxolone is its mechanism of action that modulates the action of gamma-aminobutyric acid Type A (“GABAA”). By stimulating GABAA receptors, the nerve cells in the brain (i.e. neurons) will receive an inhibitory signal for it to cease firing. Ultimately, the GABAA activation calms down seizures (conditions, in which the neuronal signals are amplified into hyper and chaotic patterns that induce the body to twitch and jerk).
As mentioned, the science powering ganaxolone is sound. Looking ahead, I strongly believe that Marinus will push the drug into a Phase 3 study. Ultimately, it's highly likely that ganaxolone will be FDA approved. Be that as it may, there are more to bioscience investment success than approval.
Given that the company's market cap is less than $100M, it can be quite difficult for Marinus to raise cash through a public offering. As a rule-of-thumb, I prefer an equity raise for funding drug development than to incur a bank debt. The lender can recall the short-term bank debt at the first sign of trouble and thereby subjects the company to filing a Chapter 11.
In my view, it'll be an uphill battle for Marinus unless the company can secure a development and commercialization partner. The other investment variable is that, due to its size limitation, Marinus doesn't get much analyst coverage, be it the Wall Street analysts or the independent analyst like myself. As we know, most young bioscience companies "live or die" by market awareness and investor's support.
As usual, the choice to buy, sell, or hold Marinus is ultimately yours to make. In my view, it's prudent to only purchase a tiny amount of shares. That way, you won't lose much if the company fails. If Marinus secures a partner, the shares are likely to take off, for multiple fold profits. After all, that's what the company truly needs right now. The stellar drug is already there.

You Can Access The FULL Article HERE.

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