Shares of Minerva Neurosciences (NASDAQ:NERV) dropped by as much as 27.4% in pre-market trading Thursday morning.
What's sending shareholders to the exits? The biotech's stock is cratering this morning in response to a disappointing phase 2b trial readout for the experimental depression medication MIN-117. Minerva was evaluating the drug as a treatment for adults with moderate to severe major depressive disorder (MDD), but it reportedly missed both its primary endpoint and key secondary endpoints.
MIN-117, as a treatment for MDD, could have been a blockbuster-level product. After all, a whopping 17 million Americans reportedly suffer from MDD on an annual basis, and nearly two-thirds of these patients ultimately fail to respond to the current regimen of available treatment options. In short, Minerva whiffed on a massive commercial opportunity with this clinical failure.
In an after-hours press release yesterday, Minerva said that it will cease clinical development for the molecule as a treatment for MDD due to this unfortunate outcome. That's probably the best course of action, given that MIN-117 couldn't separate itself from placebo on either the study's primary or secondary endpoints.
Fortunately, Minerva does have other drug candidates in the pipeline to fall back on. As things stand now, it has drugs under development for high-value indications such as schizophrenia, insomnia, and Parkinson's disease. So, while this clinical setback is certainly bad news, this hefty sell-off might turn out to be an outstanding buying opportunity for risk-tolerant investors with a long-term mindset.