Please ensure Javascript is enabled for purposes of website accessibility

Why Minerva Neurosciences Is Heading Higher Today

By George Budwell – Updated Jun 1, 2020 at 1:18PM

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 biotech's shares are mounting a modest comeback after their ugly decline on Friday.

What happened

Minerva Neurosciences (NERV 0.53%), a small-cap biotech, is rebounding a bit Monday after a dramatic plunge on Friday. Specifically, the drugmaker's shares are up by 16.4% as of 12:47 p.m. EDT. 

So what

Minerva's shares cratered by 72.5% on Friday in response to the late-stage failure of its lead drug candidate, roluperidone, as a treatment for symptoms associated with schizophrenia. The drug did no better than a placebo on either the study's primary endpoint of reduction in negative symptoms or a key secondary endpoint (improvement in personal and social performance measurements).

A black and white bar chart illustrating a rebound.

Image Source: Getty Images.

That being said, Minerva's brain trust did not immediately throw in the towel on roluperidone. Instead, management argued that the drug missed its primary endpoint due to a larger-than-expected placebo effect at the week 12 benchmark. Under that theory, roluperidone may still merit further study. 

Now what

Minerva's plans for roluperidone's clinical development will likely hinge on the outcome of upcoming discussions with the Food and Drug Administration. The good news is that it's certainly not out of the realm of possibility that the FDA might recommend another trial, perhaps with a modestly different design. 

It is certainly not without precedent for a psych med to grab a regulatory approval after a poor showing in one of its first pivotal trials. Nonetheless, it's still probably best to watch this risky biotech stock from the safety of the sidelines for the time being.   

George Budwell 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.
$9.45 (0.53%) $0.05

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

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.