Truist cuts Marinus Pharma to hold, lowers price target Via Investing.com
On Thursday, Truist Securities revised its rating on Marinus (NASDAQ:) Pharmaceuticals (NASDAQ:MRNS), removing the rating from Buy to Hold. The amendment follows a recent announcement from the company regarding the Phase 3 clinical trial of TrustTSC. Marinus reported that the trial did not meet its primary goal of reducing seizures compared to placebo. As a result, the company decided to stop further development of the drug and is now considering other strategic options.
The results of the Phase 3 study showed that the oral drug candidate GNX reduced seizures by 19.7%, which was not significantly different from the placebo's 10.2% reduction. Administrators expressed their unexpected findings, noting that Phase 3 results were similar to Phase 2 despite better tolerability and less dropout. They also indicated that the drug's mechanism of action may not work as expected.
Truist Securities lifted its previous $10 price target on shares of Marinus Pharmaceuticals, citing recent volatility and a lower share price. The company's management team is awaiting more information from the TrustTSC study, including laboratory data, seizure types, and demographic information. However, they do not expect that this information will change the market opportunities of the drug.
Market research conducted by the company suggested that a 20% reduction in placebo-corrected exposure would be required for commercial success. With only a 10% reduction noted in stage 3, the drug's commercial outlook is considered negative. Despite this setback, Truist acknowledges the value of Marinus' other product, Ztalmy, which is already on the market for the treatment of CDKL5 Deficiency Disorder (CDD).
Truist estimates that Ztalmy could generate sales of $33 million by the end of 2024 and projects its top sales could exceed $100 million by 2030. However, this speculation is not enough to maintain a positive view on the stock, leading to a decline in Hold and Hold. removal of target value.
In other recent news, Marinus Pharmaceuticals has experienced a series of developments. The company decided to halt the development of ganaxolone following the postponement of the Phase 3 trial. Despite this, Marinus reported promising results from its Phase 3 RAISE trial of the seizure treatment drug, ganaxolone. The company also received a new US patent for its epilepsy drug, ZTALMY, which will expire in September 2042, and successfully asserted a patent related to the use of ganaxolone.
Marinus Pharmaceuticals' net product revenue increased to $8 million in the second quarter, primarily due to ZTALMY. The company plans to launch ZTALMY for tuberous sclerosis complex in the second half of 2025. Despite a pre-tax loss of $35.8 million per quarter, the company aims to meet its 2024 revenue guidance, targeting product revenue of between $33 million and. $35 million.
Analysts continued to follow Marinus closely. TD Cowen maintained its buy rating on the company, while Oppenheimer upgraded the stock to Outperform. Both companies expressed confidence in the trial design and the potent efficacy of ganaxolone.
InvestingPro Insights
The latest data from InvestingPro sheds more light on Marinus Pharmaceuticals' financial position, aligned with the challenges highlighted in the article. The company's market capitalization reached $16.25 million, reflecting the market's reaction to the disappointing Phase 3 trial results.
InvestingPro Tips points out that Marinus is “burning through cash fast” and “suffering from weak gross profit margins,” justifying the company's decision to halt further clinical development and explore other strategic options. The tip “analysts don't expect the company to be profitable this year” is consistent with the article's discussion of the downturn in drug development.
Despite these challenges, InvestingPro data shows that Marinus has achieved a solid return of 19.43% in the last three months. This contrasts with the negative sentiment expressed in the headline, which suggests some investors still see potential in the company's flagship product, Ztalmy.
For readers interested in comprehensive analysis, InvestingPro offers 10 additional tips for Marinus Pharmaceuticals, which provide a deeper understanding of the company's financial health and market conditions.
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