Minerva Neurosciences Inc (NASDAQ:NERV) shares are climbing Tuesday after the company announced up to $200 million in funding to support development of roluperidone for schizophrenia.
What Happened: Minerva secured a securities purchase agreement with institutional investors providing up to $200 million in gross proceeds through a private placement. The arrangement includes $80 million in immediate funding through Series A preferred stock, plus up to $80 million more if Tranche A warrants are fully exercised.
Another $40 million could be unlocked through cash exercise of Tranche B warrants after reaching a specific milestone.
Minerva raised the funds after reaching agreement with the FDA in August on its Phase 3 trial plan for roluperidone. With that clarity, the new funding is expected to support the trial and the drug's resubmission for approval.
Vivo Capital LLC led the round, joined by fresh and returning backers such as Janus Henderson Investors, Federated Hermes Kaufmann Funds, Farallon Capital Management and multiple healthcare-focused funds. Jefferies LLC served as sole placement agent.
Minerva plans to deploy proceeds toward conducting and expanding the Phase 3 trial, NDA preparation and resubmission, U.S. commercial launch readiness if approved, plus working capital and general operations.
“We will now refocus all of our efforts on the successful execution of the confirmatory trial with the objective of demonstrating that roluperidone can effectively treat patients with impairing negative symptoms,” said Dr. Remy Luthringer, chairman and CEO.
Roluperidone targets negative symptoms of schizophrenia, as in those that hinder independent living. About 50-60% of schizophrenia patients experience at least one primary negative symptom. Although multiple antipsychotics hold FDA approval for schizophrenia treatment, none specifically address the primary negative symptoms, representing an unmet medical need.
NERV Analyst Ratings
Over the last year, HC Wainwright & Co maintained a relatively consistent neutral rating for the company. The most recent action was on Feb, 26, when they reiterated their neutral stance and set a target of $5.00. This corroborates their previous rating on Nov. 6, where they also stood firm on their neutral rating and $5.00 target.
However, it’s worth noting that there has been a gradual decrease in the target set by HC Wainwright & Co. throughout the year. Earlier in the year, on May 2, they maintained their neutral rating but lowered the target from $11.00 to $7.00. The target was further reduced to $5.00 on Aug. 7, indicating a potential shift in market sentiment.
NERV Price Action: Minerva Neurosciences shares were up 151% at $6.69 at the time of publication on Tuesday. The stock is trading at a new 52-week high according to, Benzinga Pro.
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