Shares of Marinus Pharmaceuticals Inc. (MRNS -4.51%), a clinical-stage biopharmaceutical company, are sliding in response to an upcoming secondary offering. In October, the company told shareholders it had enough cash on hand to fund operations into 2020; disappointed investors have pushed the stock 17.1% lower as of 3:48 p.m. EST on Wednesday.
Marinus Pharmaceuticals is developing ganaxolone, a GABAA modulator as a new type of treatment for epilepsy, and more recently postpartum depression. Back in 2016, the treatment failed to beat a placebo in a phase 3 epilepsy study, and recent phase 2 postpartum depression data wasn't thrilling enough to give the stock much lift.
The results were good enough, though, to convince Marinus to go forward with phase 3 studies that are going to get expensive. To help pay for it all, the company will offer up to 13.8 million shares of its stock. That's going to raise Marinus' outstanding share count around 34%, which will cut into shareholders' slice of profits the company might see from sales of the drug.
Postpartum depression affects around one in nine women who have given birth in the U.S., and physicians are clamoring for more effective treatment options. An eventual approval could make ganaxolone a blockbuster, but it might not be able to compete with a stronger-looking treatment the FDA is reviewing right now.
Sage Therapeutics (SAGE -1.01%) is waiting for the FDA to issue a decision for Zulresso -- formerly brexanolone -- that has been pushed back from December to March 2019. During a pivotal postpartum depression study, patients treated with Zulresso showed a 19.9-point HAM-D score improvement that was 5.9 points better than the placebo group when interviewed 60 hours after starting treatment. Marinus recently reported that 10 patients treated with ganaxolone showed a 16.9-point improvement at the same-length followup that was 4.2 points better than the placebo group.
Perhaps ganaxolone can differentiate itself down the line with larger studies that Marinus has planned, but its chances don't look so great right now.