Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Minerva Neurosciences Collapsed Today

By Maxx Chatsko – Updated May 29, 2020 at 4:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's lead drug candidate flopped in a phase 3 trial. Can a longer-term follow-up study resurrect the asset?

What happened

Shares of Minerva Neurosciences (NERV 0.74%) fell by as much as 86% Friday after the company reported disappointing late-stage results for its lead drug candidate. In a phase 3 trial, roluperidone proved statistically no better than a placebo in treating negative symptoms of schizophrenia. The drug candidate failed to meet both the primary and secondary endpoints of the study. 

Minerva Neurosciences has three candidates in its pipeline, although only roluperidone and seltorexant have advanced to clinical trials. The outcome of this study is devastating for the development-stage company, although there's an outside chance that roluperidone's prospects can be salvaged. The small-cap stock closed the trading day down 72.5%.

A pink arrow crashing through the x-axis of a chart.

Image source: Getty Images.

So what

The phase 3 trial compared two doses of roluperidone (32 mg and 64 mg) to placebo in reducing negative symptoms of schizophrenia over a 12-week period. The primary endpoint was achieving a reduction in the PANSS Marder Negative Symptoms Factor Score (NSFS); the secondary endpoint was an improvement in the Personal and Social Performance (PSP) Scale Total Score. 

But the study showed no statistically significant difference between either the low or high dose and placebo over the 12-week trial. Given that a statistically significant improvement is the gold standard of trial design and outcomes, investors must acknowledge that the experimental asset failed with respect to the design of the study. 

While the company noted that individuals receiving the placebo showed an unusually large improvement in symptoms, the non-pharmaceutical factors driving that result could have also been present among people in the roluperidone cohorts. Therefore, investors must be careful with assuming the large effect from placebo alone doomed the trial.

Now what

Although roluperidone has lost some of its luster, there's a chance it still has value. Minerva Neurosciences reported that both the low and high doses achieved statistically significant differences in NSFS (the primary endpoint) from placebo at week 4, while the high dose replicated the performance at week 8. The high dose also demonstrated statistically significant improvement in PSP (the secondary endpoint) from placebo at week 4 and week 8. 

What does it mean? Investors can't be sure, but in the original development strategy, the initial 12-week study was to have been followed by an open-label, 40-week study. All individuals from the placebo arm were expected to be given either the low dose or high dose of the experimental therapy and followed for 40 weeks total. If roluperidone can deliver significant improvements in symptoms over longer periods of time, then perhaps it has a future. 

For now, investors need to be cautious and resist the urge to sift through the data for encouraging tidbits. Minerva Neurosciences might choose to abandon the 40-week study once it completes an analysis of the 12-week study data. Considering the company's lack of pipeline depth, investors should probably avoid this stock.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Minerva Neurosciences, Inc. Stock Quote
Minerva Neurosciences, Inc.
NERV
$9.52 (0.74%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.