Shares of MediciNova (NASDAQ:MNOV) 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.
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.
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.
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.