MediciNova (NASDAQ: MNOV) didn’t have much of a fallback strategy last May, when the San Diego biotech reported that a mid-stage trial of bedoradrine sulfate for intravenous treatment of acute asthma attacks “did not statistically meet the primary endpoint.”
Investors responded by voting with their feet, hitting the exit in a sell-off that cut the price of MediciNova’s stock from more than $3 a share to roughly $1.50. It was a heavy blow, and the share price has been moving between $1.60 and $2 ever since.
The company, which I profiled earlier, has been trying to regroup. MediciNova executives met with the FDA in late October to discuss the steps the company must take before they can move bedoradrine forward to late-stage trials. In a statement issued late Thursday, MediciNova laid out its revised drug development strategy for bedoradrine—and said it was expanding its development efforts to include ibudilast, a potential drug for treating different types of drug addiction.
The company has been working hard to publicize its revised course, and I was briefed on the new strategy in a phone call with Michael Coffee, MediciNova’s chief business officer, and Mark Johnson, director of investor relations.
But Wall Street clearly remains skeptical. Medicinova shares closed at $1.73 in regular trading yesterday, gaining just 4 cents in anemic trading of 9,500 shares—less than a third of MediciNova’s average daily trading volume over the previous three months. The company’s available cash also has been a concern, with just $5.7 million in the bank at the end of September. The company said in August that it had secured an equity line through a two-year, $20-million stock purchase agreement with Chicago-based Aspire Capital.
Perhaps the biggest challenge for MediciNova, though, is that the FDA’s feedback from their end-of-Phase-II meeting essentially moved the company’s goal post. Instead of showing an improvement in a breathing test that measures the forced expiratory volume (FEV1) of asthma patients (compared with a placebo), Coffee and Johnson said the FDA said the intravenous use of bedoradrine in hospital emergency rooms should be measured differently—by a reduced need for patient hospitalizations. Because the intravenous use of bedoradrine is intended as an emergency treatment for acute asthma attacks, Coffee said it’s clear the company will have to adopt a clinical outcome (a reduction in hospitalizations) as its primary endpoint to win FDA approval.
Unfortunately, the clinical trials done so far were designed to meet a different endpoint—an improvement in lung capacity. So additional studies must be done to determine the optimum dose needed to meet the new goal, as well as the final formulation to be used in manufacturing, before MediciNova can design its pivotal clinical trial, Coffee said.
Japan’s Kissei Pharmaceuticals, which licensed the drug, will be funding the manufacturing-related studies, and MediciNova has been in talks with Kissei about funding the other needed trials, Coffee said. The decision to move forward with the drug depends on the pharma partner, Coffee said, noting that Kissei already has invested $7.5 million in MediciNova and provided another $2.5 million in R&D funding. Still, Coffee estimated the additional studies would probably require another 18 months before bedoradrine could advance to a late-stage trial.
On the bright side, MediciNova announced last month that a recent U.S. patent allowance covering the use of bedoradrine for acute asthma attacks was extended to 2030—giving the company plenty of time to commercialize the drug.
The MediciNova executives said they are especially encouraged by the prospects for advancing another compound—ibudilast—as a treatment for drug dependence. Ibudilast already is in a mid-stage trial for opioid-dependent patients at Columbia University, and an early stage trial of methamphetamine-dependent patients is underway at UCLA. A mid-stage trial in Australia is studying the use of ibudilast as a treatment for “medication overuse headaches,” and Coffee said a pending grant would enable the company to study ibudilast as a treatment for patients with multiple sclerosis.
MediciNova has been able to move ibudilast forward because the National Institute of Drug Abuse funded most of the work. Still, some positive results could go a long way toward restoring investor confidence—and results of the opioid-dependent study could be presented at the 2013 meeting of the American Academy of Neurology, which begins March 16 in San Diego.
In the meantime, Coffee and Johnson say MediciNova has put a priority on developing ibudilast to treat methamphetamine dependence, where there is currently no approved drug therapy. To accelerate the work, MediciNova says it is laying plans to begin a mid-stage meth trial in the first half of this year.