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Here's Why MediciNova Is Soaring Today

By Maxx Chatsko – Jul 27, 2020 at 1:09PM

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The small-cap pharmaceutical company announced a collaboration to develop a coronavirus vaccine.

What happened

Shares of MediciNova (MNOV 2.50%) jumped over 65% today after the company announced a collaboration with BioComo and Mie University to develop a vaccine against SARS-CoV-2. The partners, both based in Japan, have developed a novel vector for delivering viral genes and proteins into human cells. The technology platform has been used to develop experimental vaccines against Ebola virus and respiratory syncytial virus (RSV).

Under the agreement, MediciNova will gain exclusive worldwide development rights to use the vector technology for an experimental SARS-CoV-2 vaccine. Although there are inherent advantages to the technology platform (on paper), the collaboration is certainly a little late to the global effort to develop safe and effective vaccines against the novel coronavirus. Does that matter?

As of 11:26 a.m. EDT, the small-cap stock had settled to a 64.7% gain.

A man holding a white arrow pointing up

Image source: Getty Images.

So what

For all of the hype surrounding genetic medicines such as gene therapies and CRISPR gene-editing tools, much less attention is given to the most important aspect of these experimental drugs: delivery. Inadequate delivery technology has tripped up RNA interference (RNAi) and gene therapy drug candidates in the past, and it's bound to present obstacles to gene-editing tools now making their way through clinical trials. 

It matters for vaccines, too. For example, China's CanSino recently reported early-stage results for its SARS-CoV-2 vaccine candidate. Investors were disappointed to learn the experimental therapy wasn't very effective. That's because over half of the trial participants had at least partial immunity to the viral vector chosen to deliver the vaccine payload. It essentially means CanSino's vaccine won't be competitive globally, even if the Chinese government forces it to be commercialized domestically.

The collaboration between MediciNova, BioComo, and Mie University puts delivery front and center. The SARS-CoV-2 vaccine candidate to be developed will utilize a viral vector called BC-PIV, which is based on recombinant human parainfluenza virus type 2 (HPIV-2). In simpler terms, BC-PIV is able to carry multiple viral proteins on its surface and within its membrane, can maintain proper structure of the proteins comprising the therapeutic payload, and won't cause secondary immune responses (HPIV-2 itself doesn't activate the immune system).

The vector's effectiveness means vaccines based on it wouldn't need efficiency-boosting adjuvants, which will likely be in short supply globally for the next few years. A BC-PIV vaccine can also be formulated as a muscular injection or as a nasal spray, although effectiveness would vary. 

Now what

Investors should be pleased that MediciNova's efforts to develop a SARS-CoV-2 vaccine are beginning with a significant focus on delivery. The chosen viral vector, BC-PIV, has inherent advantages over competing methods that should lower risk surrounding the safety and efficacy of resulting vaccines. That doesn't guarantee success, but it's a solid start. 

Of course, investors might not want to get too carried away right now. MediciNova sports a market valuation of only $400 million after today's pop. The world will need as many safe and effective SARS-CoV-2 vaccines as possible to reduce risks from manufacturing and distribution, but the company has a long way to go before it has a vaccine ready for commercialization.

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.

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