March 26, 2019 - 8:03pm EST by
2019 2020
Price: 7.85 EPS (1.25) (1.25)
Shares Out. (in M): 39 P/E n/a n/a
Market Cap (in $M): 306 P/FCF n/a n/a
Net Debt (in $M): 0 EBIT 0 0
TEV ($): 218 TEV/EBIT n/a n/a

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Despite the fact I have an undergraduate degree in Chemistry and a strong Biology background, I rarely venture into the complexities of the Biotech equity world (In fact, this is the first time I have posted such a company since I joined VIC in its early days.), but I am intrigued by Minerva and believe it merits serious consideration.

Yes, Minerva is a clinical-stage biopharmaceutical company founded in 2007 and it went public in 2014.The Company is focused on a group of products which focus on nervous system disorders. (e,g., Schizophrenia, Major Depression, insomnia, anxiety and Parkinson's disease.) Of course, the issue with these companies is will they burn to death before they demonstrate the viability of their compounds. They have $88 million in cash on their balance sheet as of year-end 2018. These funds should last about two years, which should be more than sufficient time to see if we have some effective compounds.

I don't like early phase products because there is such limited data for anyone to make an intelligent assessment, even an expert, that they are a complete crap shoot, but sometimes you can look at Phase 3 product that looks like it has a reasonable probability of success in an area where it would meet a broad unmet market need. Here is where my interest in Minerva lies.


Minerva began phase 3 trials on Roluperidone (Min-101) in December 2007. Roluperidone is designed to treat the negative symptoms associated with schizophrenia (Social Withdrawal, lack of motivation, Extra-pyramidal Symptoms (uncontrolled twitching and shaking), Psychosis, Demoralization, Substance abuse, Depression, medical illness, mental retardation, Anxiety, etc.) Today's FDA-approved drugs all treat the actual schizophrenia but not the related negative symptoms which can be horrible and life-long. There are other drug companies pursuing such a drug, but Minerva is the unambiguous leader. Top line results for Roluperidone are expected in mid 2019, safety data is expected in early 2020 and it has a targeted launch in 2021/22. Hence, the Company has the money to demonstrate its efficacy and safety of the drug.

The Phase 2b trial conducted on 90 subjects, demonstrated no serious adverse effects at dosages up to 160 mg, well above the maximum 64 mg dose in Phase 3. The Journal of Clinical Psychiatry has published on-line results demonstrating cognitive improvements in patients with schizophrenia treated with Roluperidone. This peer-reviewed randomized controlled study demonstrated that the drug demonstrated cognitive improvements in negative symptoms. This was the third peer reviewed publication of Phase 2b data with Roluperidone.


How does Roluperidone work? The compound is designed and has been shown to block serotonin receptors and sigma receptors, two receptors in the brain that are involved in the regulation of mood, cognition, sleep and anxiety. The drug has been designed to block a specific serotonin receptor called 5-HT 2a. When this receptor is blocked certain symptoms of schizophrenia, such as hallucinations, delusions, agitation and thought and movement disorders and other negative symptoms of schizophrenia can be minimized.  Roluperidone also blocks the Sigma 2 receptor,which is involved in movement control, learning and memory and psychotic symptom control. Blocking sigma 2 also increases the calcium level in neurons, which can improve memory. Pre-clinical findings have also shown  that Roluperidone effects BDNF, which has been associated with neurogenisis, neuropplasticity, neuroprotection, synapse regulation, learning and memory.


In December 2017, the pivotal Phase 3 trial of Roluperidone began. The trial is a multi center, randomized, double-blind, parallel-group, placebo-controlled, 12 week study to evaluate the efficacy and safety 32 mg and 64 mg doses of Roluperidone in adult patients with negative symptom of schizophrenia. The 12-week study will be followed by a 40-week open-label extension period during which patients on the drug will continue receiving their original dosage and patients originally on a placebo will receive either 32 mg or 64 mg of the drug. This is all a mouth-full but the study must be strictly conducted to statistically demonstrate the efficacy and safety of the drug.

Here are the updates to the study released by the Company with their March, 2019  year-end press release;

1) The Company expects the completion of the enrollment 0f 500 people by the first half of 2019.

2) Results announced on November 19,2018 from a dose escalation study of Roluperidone administered at supra-therapeutic doses in healthy volunteers suggested that there was an expanded therapeutic window and significantly improved cardiovascular safety of the drug. The results suggest that the drug can be tested at much higher doses on schizophrenic patients with an exacerbation of psychosis.

3) On August 22, 2018 the Company announced that the drug showed an impact on BNDF, which has been associated neurogenesis, learning and memory. It is also involved in Schizophrenia. These results add more data that the compound is active in treating the disease.


4) On May 17, 2018, the Company announced that the Journal of Clinical Psychiatry had published data demonstrating improvements in patients taking Roluperidone for Schizophrenia.


Roluperidone is not the only drug in the pipeline, but from my perspective it is the most promising and we will find out very soon whether or not it will meet the parameters of the study allowing it to garner FDA approval. What has me excited also is that this is not a "me-too" drug. It meets a desperate clinical need that is not being met across the world for the treatment of a common disease. This has the potential to be a block-buster if the positive results  continue to come in. My bet is if the data is good, Minerva will get bought out a huge premium by one of the major pharmaceutical companies.

Yes, I hear you this is preliminary data. The broader study could demonstrate reduced efficacy or toxicity. This is always  a risk in any drug trial, but the data looks excellent, so far, and the chance of success is good. The point is that if we are wrong we get zero, but if we are correct we get multiples of the share price. The expected value is high but so is the standard deviation. This is not for the conservative investor, but there is clearly value here.


Now let's consider the rest of Minerva's pipeline. There might be something good here, but I am putting on my skeptic's hat and assuming that by buying the shares I am just receiving some low probability  lottery tickets with these other candidates, some free options.


Seltorexant (Min-202): In Phase 2b program. It is a selective orexin 2 receptor antagonist being co-developed with Janssen for the treatment fo insomnia and depression. Recent research demonstrates that orexin affects secretion and control of stress hormones. It's interesting but they are entering a very crowded field.


MIN-117: This drug is designed to treat depression using a different mechanism than the conventional medicines, targeting  the androgenic alpha receptors. Again, there is no great demand for this product and why would it be any better than existing therapy?


Min-301: Pre-clinical phase possible treatment for Parkinson's disease.




I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.


The Catalyst is very straight forward here. Once we start receiving the results of the Phase 3 clincal trial we will know exactly where we stand.

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