In a report released today, Douglas Tsao from H.C. Wainwright reiterated a Hold rating on Minerva Neurosciences (NERV – Research Report), with a price target of $5.00.
Douglas Tsao has given his Hold rating due to a combination of factors surrounding Minerva Neurosciences’ current situation. The primary concern is the uncertainty regarding the future of roluperidone, a drug intended for treating negative symptoms in schizophrenia patients. The company has been in discussions with the FDA following a complete response letter, which indicated the need for further studies to establish the drug’s efficacy and safety. Despite completing a Phase 1b trial demonstrating a satisfactory safety profile, the necessity for additional efficacy studies remains unmet.
Financially, Minerva Neurosciences reported a decrease in cash reserves, with a cash position of $21.5M at the end of 2024, down from $41M at the end of 2023, suggesting a limited cash runway of about one year. The company is also anticipated to require more capital to advance roluperidone, especially with upcoming royalty obligations. Although Boehringer Ingelheim’s 18% stake in Minerva may provide some support, the financial and regulatory uncertainties contribute to the Hold rating. The valuation is based on a risk-adjusted revenue estimate, considering the probability of success for roluperidone at 10%, and acknowledges potential risks such as unmet clinical trial expectations and regulatory challenges.
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