Please ensure Javascript is enabled for purposes of website accessibility

Why MediciNova Stock Skyrocketed Today

By Joe Tenebruso - Mar 10, 2021 at 5:25PM

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 announced a major new development partnership.

What happened

Shares of MediciNova (MNOV -0.42%) soared on Wednesday after the biopharmaceutical company announced a collaboration with the U.S. Department of Health and Human Services (HHS). 

By the close of trading, MediciNova's stock price was up 54% after having been up by as much as 90% earlier in the day.

So what

MediciNova will work with the HHS's Biomedical Advanced Research and Development Authority (BARDA) to evaluate whether the biotech's MN-166 (ibudilast) compound could serve as a medical countermeasure against chlorine gas-induced lung damage.

BARDA will fund proof-of-concept studies of MN-166. The compound is the first to receive development support from BARDA's new Repurposing Drugs in Response to Chemical Threats (ReDIRECT) program.

A person is pointing to an upwardly sloping line.

Investors bid up MediciNova's share price on Wednesday. Image source: Getty Images.

MediciNova Chief Medical Officer Kazuko Matsuda said MN-166 has shown an ability to lessen pulmonary edema -- a condition caused by excess fluid in the lungs -- in an acute respiratory distress syndrome (ARDS) animal model. MN-166 also protected against injury by reducing cell death in lung tissue.

"Considering that pulmonary edema is a hallmark feature of exposure to chlorine, MN-166 has the potential to improve health outcomes and save lives," Matsuda said in a press release.

Now what

Analysts see plenty of gains ahead for MediciNova's shareholders. For one, Maxim Group analyst Jason McCarthy placed a buy rating on the biotech's stock on Wednesday. He asserts that MediciNova's compounds could be applicable to a broad array of maladies, including neurodegenerative and liver diseases, as well as certain forms of cancer. Based on that, McCarthy expects MediciNova's stock price could surge to $15 in the next year -- about 72% higher than the $8.74 a share price where it ended trading Wednesday. 

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

MediciNova, Inc. Stock Quote
MediciNova, Inc.
MNOV
$2.39 (-0.42%) $0.01

*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 service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

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.