Drug company Marinus Pharmaceuticals is up an amazing 30% this morning, but indications show prices spiked a lot higher, up to 58% in premarket activity, a major coup for a nano cap company with a tenuous balance sheet.
This big move upward is predicated on news of a phase 2 clinical trial that yielded positive results in evaluating substance called ganaxolone that the company is investigating for treatment of refractory statics epilepticus: the drug, which is intended to treat these more severe types of seizures, is headed for phase 3.
Traders saw MRNS rising up to starting point of $1.95 this morning after a prior close at $1.37 last night. The spike brings Marinus value up over highs earlier in the month to about $1.85, though it doesn’t begin to touch six-month highs of $5.20, and year-over-year activity reveals the stock has been devalued by about 90%. For the year, MRNS shows 52-week highs of $10.54 and 52-week lows of $0.77.
Just six days ago, Yahoo Finance covered some of the potential benefits and risks of investing in Marinus, looking at the company’s cash flow and when the firm might burn through its entire financial reserves.
“There’s no doubt that money can be made by owning shares of unprofitable businesses,” analysts write, beginning with a deprecation of the MRNS track record. “In June 2019, Marinus Pharmaceuticals had US$52m in cash, and was debt-free. Looking at the last year, the company burnt through US$37m. Therefore, from June 2019 it had roughly 17 months of cash runway. While that cash runway isn’t too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash.”
Now, company leaders are optimistic about the potential for the dug study to lift MRNS higher.
“All patients who received the target dose of ganaxolone, regardless of underlying cause of status, experienced status cessation without progression to additional second line AEDs or third line anesthesia,” commented Dr. Scott Braunstein, Chief Executive Officer of Marinus in a press statement. “These data give us confidence in our IV dose selection as we make preparations for advancing into Phase 3 with our first hospital-based ganaxolone indication. I would like to thank the study investigators, patients and their families for participating in this important study.”