2023 年 8 月 22 日

Zacks Small-Cap Research による当社レポートの発表に関するお知らせ
現地時間の 8 月 21 日、米国シカゴに本拠を置く投資家向け情報サービス企業 Zacks SmallCap Research の David Bautz 氏による、当社レポートが発表されましたので、参考情報としてお知らせいたします。
なお、当該レポートは、恐れ入りますが、権利の都合上、英文のままでのご案内となります
ので、ご了承ください。
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MediciNova,Inc.（メディシノバ・インク）東京事務所 IR 担当
E-mail infojapan@medicinova.com
URL

https://medicinova.jp/

August 21, 2023
David Bautz, PhD
312-265-9471
dbautz@zacks.com

Zacks Small-Cap Research
Sponsored – Impartial - Comprehensive

Sponsored – Impartial - Comprehensive

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10 S. Riverside Plaza, Chicago, IL 60606

MediciNova, Inc.

(MNOV-NASDAQ)MNOV: Expecting Data for MN-166 in GBM
and Chlorine Gas-Induced Lung Injury…

OUTLOOK

Based on our probability adjusted DCF model that takes into
account potential future revenues from MN-166 in ALS,
progressive MS, addiction, and as an MCM; and MN-001 in
NAFLD, MNOV is valued at $26.00/share. This model ishighly dependent upon continued clinical success of thecompany’s assets and will be adjusted accordingly based
upon future clinical results.

Current Price (08/21/23)
Valuation$2.31$26.00

MediciNova, Inc. (MNOV) recently filed form 10-Q withfinancial results for the second quarter of 2023. The
company has a large number of indications for its twolead development compounds, and we anticipate data
for two of those programs in the near term. Part 2 of a
Phase 2 clinical trial of MN-166 (ibudilast) inglioblastoma (GBM) was fully enrolled as of January
2023. Since there is a six-month treatment period, we
anticipate data from that study will be forthcoming. In
addition, now that the contract with BARDA has expired
regarding MN-166 as a medical countermeasureagainst chlorine gas-induced lung injury, we anticipate
the results of those studies being announced in thenear term.

SUMMARY DATA
52-Week High
52-Week Low
One-Year Return (%)
Beta
Average Daily Volume (sh)

$2.66
$1.95
1.32
0.98
16,757

Shares Outstanding (mil)Market Capitalization ($mil)
Short Interest Ratio (days)
Institutional Ownership (%)
Insider Ownership (%)

49
$113
N/A
11
17

Annual Cash Dividend
Dividend Yield (%)
5-Yr. Historical Growth Rates
Sales (%)
Earnings Per Share (%)
Dividend (%)

$0.00
0.00

Risk Level
Type of Stock
Industry

Average
Small-Value
Med-Biomed/GeneZACKS ESTIMATES
Revenue(In millions of $)

Q1
(Mar)

Q2
(Jun)

Q3
(Sep)

Q4
(Dec)

Year
(Dec)

2022

0A

0A

0A

0A

0A

2023

0A

0A

0E

0E

0E

2024

0E

2025

0E

Earnings per Share
N/A
N/A
N/A

P/E using TTM EPS

N/A

P/E using 2018 Estimate
P/E using 2019 Estimate

N/A
N/A

2022
2023
2024
2025

© Copyright 2023, Zacks Investment Research. All Rights Reserved.

Q1
(Mar)

Q2
(Jun)

Q3
(Sep)

Q4
(Dec)

Year
(Dec)

-$0.07 A-$0.08 A-$0.07 A-$0.06 A-$0.29 A-$0.06 A-$0.06 A-$0.08 E-$0.08 E-$0.28 E-$0.32 E-$0.35 E

WHAT’S NEW
Business Update
Data Expected for MN-166 in GBM
In January 2023, MediciNova, Inc. (MNOV) announced that the Phase 2 trial of MN-166 (ibudilast) in
combination with temozolomide (TMZ) for the treatment of glioblastoma (GBM) was fully enrolled(NCT03782415). This is a two-part trial taking place at Dana-Farber Cancer Institute; Part 1 of the trial
evaluated the safety and tolerability of MN-166 in combination with TMZ and determined the optimal dose of
MN-166 to use in Part 2 of the study. In August 2021, MediciNova announced completion of a safety review ofPart 1 of the trial, which enrolled 15 subjects. There were no concerning safety signals observed in Part 1 andthere were no serious adverse events related to MN-166. Five out of 15 subjects completed cycle 6 without
disease progression, i.e. 33% of subjects were progression-free at 6 months. Part 2 will evaluate the efficacy
of MN-166 and TMZ as measured by the proportion of subjects who are progression-free at 6 months.
Additional outcome measures will include overall survival, response rate, and median six-month progressionfree survival.
In February 2023, MediciNova announced the presentation of new data regarding tumor tissue analysis andclinical outcome from Part 1 of the study (the dose ranging portion of the trial). The tumor tissues wereanalyzed to determine potential predictors of tumor response to MN-166 and TMZ combination therapy. Study
participants were divided into two groups: non-responders (disease progression within five months of receiving
MN-166/TMZ) and responders (no disease progression for five months after receiving MN-166/TMZ). The data
showed that responders had a lower percentage of CD3+ T cells than non-responders (P<0.05). In addition,
CD74 expression was also lower in the responders compared to the non-responders (P=0.06). The best
predictor for tumor progression for five months in recurrent GBM patients was CD3 expression.
The use of MN-166 in GBM is based on a proteomic profiling study of GBM samples from 30 GBM patients
which was presented at the 2017 American Society of Clinical Oncology (ASCO) annual meeting (McDonald
et al). The results showed that macrophage migration inhibitory factor (MIF) was expressed in “poorresponders” (e.g., those that lived < 1 year). MIF is an inflammatory-related cytokine that is secreted bycancer stem cells. The researchers then examined an additional 168 GBM samples and found co-expressionof MIF and its receptor CD74 in 57% of the samples. In addition, co-expression of MIF and CD74 wassignificantly associated with poor survival. These results point to MIF being a suitable target for GBM
treatment. MN-166 is an inhibitor of MIF (Cho et al., 2010).
An in vivo study was previously performed using RN1 GBM cells, which were intracranially injected into thebrains of mice followed by no treatment or a combination of TMZ and MN-166 at two different concentrations.
Results showed that mice treated with the combination of TMZ and MN-166 had significantly enhanced
survival (median overall survival 114 days vs. 100.5 days, P=0.005) with suppression of MIF and CD74
expression also noted.
On August 17, 2023, MediciNova announced that an abstract regarding tumor tissue analysis data from aclinical trial of MN-166 has been selected for a poster presentation at the 28th Annual Meeting of the Society
for Neuro-Oncology (SNO), which is being held November 15-19, 2023. The title of the presentation is:“Immunohistochemistry evaluation on pre-treatment tumor tissue predicts treatment response to MN-166(ibudilast) and Temozolomide combination therapy in glioblastoma patients”.
Glioblastoma (GBM) is a primary malignant brain tumor that is complex and difficult to treat. The five-year
survival rate for glioblastoma patients is only 6.9%, and the average length of survival is estimated to be only 8months (National Brain Tumor Society). Despite available treatments including surgery, radiation, andchemotherapy, survival rates and mortality statistics for GBM have been virtually unchanged for decades.
There have only been a few drugs ever approved by the FDA specifically for the treatment of glioblastoma,and none of these treatments have succeeded in significantly extending survival beyond a few extra months.
As such, there is a great unmet medical need for better treatments for GBM.

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Update on MN-166 as a Medical Countermeasure
In March 2021, MediciNova, Inc. (MNOV) announced a partnership with the Biomedical Advanced Researchand Development Authority (BARDA) to test the potential for MN-166 (ibudilast) as a medical countermeasure(MCM) for the treatment of chlorine gas-induced acute respiratory distress syndrome (ARDS) and acute lunginjury (ALI). MN-166 is being evaluated in preclinical efficacy models of chlorine gas-induced ALI, and theseexperiments could help support the use of MN-166 in ARDS/ALI caused by other ailments, including the flu,
infections, severe burns, and pancreatitis. Under the FDA animal rule (FDA), development of MCMs do not
require human clinical trials to establish efficacy as these would not be ethical or feasible. The FDA can grant
approval of a drug for an MCM indication based on well-controlled animal studies, when the results of thesestudies establish that the drug is reasonably likely to produce clinical benefit in humans.
ARDS is a serious lung disorder that results from the small blood vessels of the lung leaking fluid that fills up
the alveoli, thus preventing proper oxygen exchange (Stevens et al., 2018). There are many causes of ARDS,
including infections (e.g., pneumonia), severe burns, pancreatitis, inhalation of smoke or chemicals, or otherserious illnesses. An excessive inflammatory response appears to be involved in the pathogenesis of ARDS
(Li et al., 2019). Current treatment options involve supportive care while the lungs heal, which involves oxygentherapy supplied through a ventilator. There are no pharmacological treatments specifically for ARDS andapproximately 40% of hospitalized patients die from it (Siegel et al., 2020).
According to the NIH, infections are the most common risk factors for ARDS (NIH). The most common
infections are due to influenza (and other respiratory viruses), pneumonia, and sepsis. There areapproximately one million adults hospitalized in the U.S. each year for pneumonia (ATS), approximately
400,000 hospitalizations due to influenza each year in the U.S. (CDC), and approximately 1 million
hospitalizations due to sepsis (UMich). While not all of these patients will go on to develop ARDS, it is thispool of patients that are at a high-risk of developing ARDS that will be the target market for MediciNova.
The release of toxic chemicals, either deliberately through chemical weapons or accidentally through an
industrial accident, can also result in ALI or ARDS. Chlorine is a widely used industrial chemical (e.g., water
purification) that has been previously implicated in both intentional and accidental releases:•

During World War I, Germany launched the first known chemical weapon attack by releasing chlorine
gas from 6,000 cylinders against French troops, which caused >1,000 casualties.

•

Multiple times in the past decade, the Syrian government of Bashar al-Assad used chlorine as achemical weapon against its enemies, and a report by the U.S. government in 2020 claimed theregime continues to pursue chemical weapons development.

•

In June 2005, a train derailment in South Carolina resulted in the accidental release of 40-60 tons ofchlorine gas (Van Sickle et al., 2009). Nine individuals died and >250 were treated for toxic chlorine
exposure.

•

A mixture of sodium hypochlorite and hydrochloric acid is sometimes used as a cleaning solution. The
chlorine gas that is produced can cause airway damage and reactive airways dysfunction syndrome(RADS) (Gorguner et al., 2004).

Chlorine inhalation results in the formation of hydrochloric acid (HCl) and hypochlorous acid (HOCl) as it
dissolves into the airway surface liquid. Both of those compounds can result in oxidative injury following theformation of reactive oxygen species, which can result in edema, inflammation, and immediate airway
constriction. In addition, chlorine exposure results in the recruitment of inflammatory neutrophils andmacrophages (Balakrishna et al., 2014). The inflammatory response is accompanied by increases in various
inflammatory markers such as CXCL1, GM-CSF, IL-6, and VEGF.
Current treatment for chlorine inhalation is mostly supportive care. For patients who show airway obstruction,
inhaled -2-adrenergic agonists are used (Wang et al., 2004) with early administration of corticosteroids
shown to prevent ALI in mouse models (Jonasson et al., 2013). Humidified oxygen is typically administered toall victims, however supplemental oxygen could worsen cardiopulmonary function (Okponyia et al., 2018).

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The Department of Homeland Security estimates that a deliberate release of highly concentrated chlorine gas
upwind of an urban area with 700,000 individuals would lead to approximately 5% being exposed to a lethal
dose of chlorine with approximately 17,500 fatalities and 100,000 hospitalizations (Department of Homeland
Security). Chlorine gas is fairly easy to produce, thus the U.S. government is interested in finding MCMs totreat lung injuries caused by chlorine exposure.
The potential market opportunity for MN-166 in chlorine gas-induced ALI is significant as the U.S. government
would likely decide to purchase large quantities of the drug for public health emergencies in the homeland(Strategic National Stockpile) and to protect U.S. military personnel abroad.
In addition, drugs approved as MCMs are eligible for a priority review voucher (PRV). A PRV allows the holderof the voucher to receive an expedited six-month review from the FDA for a new drug application (NDA) or
biologics license application (BLA) instead of the usual ten-month review. PRVs are fully transferrable and in
the past couple of years a number of them have sold for approximately $100 million each.
MN-166 was previously tested in a lipopolysaccharide (LPS) ARDS mouse model (Yang et al., 2020). While
this model induces ARDS through a different mechanism than chlorine gas exposure, a number of theresulting phenotypes are similar between the two models. MN-166 was shown to reduce the overexpression of
PDE4, reduce the overexpression of different inflammatory cytokines (e.g., TNF-, IL-1b, IL-6, MCP-1),
reduce pulmonary edema, and reduce lung cell apoptosis. Since ARDS can be induced by a number ofdifferent pathologic insults, success in one model system (e.g., LPS-induced ARDS) is likely to translate tosuccess in other models (e.g., chlorine gas-induced ARDS).
In June 2022, MediciNova announced positive results from a Phase 2 clinical trial of MN-166 (ibudilast) in
hospitalized COVID-19 patients at risk for developing ARDS. The trial achieved statistical significance for oneof the co-primary endpoints (the proportion of subjects free of respiratory failure), and achieved statisticalsignificance for the proportion of subjects discharged from the hospital. A total of 34 subjects were randomized
1:1 to receive MN-166 or placebo for seven days, and on Day 7, 71% of subjects in the MN-166 group and
35% of the placebo group were free of respiratory failure (P=0.02).
Phase 2 Trial of MN-166 in AUD Not Successful
In June 2023, MediciNova announced that results of the Phase 2b trial of MN-166 in alcohol use disorder(AUD) were presented at the 46th Annual Research Society on Alcoholism Scientific Meeting. The study was arandomized, double blind, placebo controlled trial in treatment-seeking men and women with moderate orsevere AUD. Participants were administered MN-166 50 mg or placebo twice a day for 12 weeks. A total of
102 subjects were enrolled in the study. The primary objective was to evaluate the effects of MN-166
compared to placebo on percent heavy drinking days (≥5 drinks for men and ≥4 drinks for women over thecourse of a 12-week treatment period.
The results of the study showed that MN-166 was not superior to placebo for reducing percent heavy drinking
days. Nor was MN-166 superior to placebo for multiple secondary endpoints. This was due to the fact thatboth MN-166 and the placebo decreased heavy drinking days by equal magnitudes. It’s notable that all of thepatients in this study, including the placebo-treated patients, were “treatment-seeking” individuals who werehighly motivated to reduce their drinking and this made it more difficult to show a difference using MN-166.
Financial Update
On August 9, 2023, MediciNova filed Form 10-Q with financial results for the second quarter of 2023. As
expected, the company did not report any revenues in the second quarter of 2023. R&D expenses in thesecond quarter of 2023 were $1.7 million compared to $2.6 million in the second quarter of 2022. The
decrease was primarily due to a decrease in manufacturing expenses. G&A expenses in the second quarter of2023 were $1.6 million compared to $1.5 million in the second quarter of 2022. The increase was primarily
due to increased non-cash stock-based compensation.
Net cash used in operating activities was $2.4 million for the second quarter of 2023. MediciNova exited thesecond quarter of 2023 with approximately $52.9 million in cash and cash equivalents. We estimate theZacks Investment Research

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company has sufficient capital to fund operations for at least the next few years. As of August 9, 2023, thecompany had approximately 49.0 million shares outstanding and when factoring in stock options a fully diluted
share count of approximately 57.3 million.
Conclusion
We look forward to results from Part 2 of the Phase 2 trial of MN-166 in GBM as well as results from thestudies of MN-166 as a MCM against chlorine gas-induced lung injury in the near future. We have removed
MN-166 as a treatment for AUD, which has caused a very slight decrease in our valuation by $1 to $26 pershare.

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PROJECTED FINANCIALS
MediciNova Inc.
Income Statement

MediciNova, Inc.
MN-166 (Multiple Sclerosis)
MN-166 (ALS)
MN-166 (DCM)
MN-001 (NASH)
Grants & Collaborative Revenue

Total Revenues

2022 A

Q1 A

Q2 A

Q3 E

Q4 E

2023 E2024 E2025 E

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0

$0

$0

$0

$0

$0

$0

$0

Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

Product Gross Margin

-

-

-

-

-

-

-

-

$9.1
$5.5
$0

$1.5
$1.5
$0

$1.7
$1.6
$0

$2.5
$1.5
$0

$2.6
$1.6
$0

$8.3
$6.2
$0

$10.0
$6.0
$0

$11.0
$6.5
$0

($14.6)($3.0)($3.3)($4.0)($4.2)($14.5)($16.0)($17.5)

-

-

-

-

-

-

-

-

$0.6

$0.0

$0.4

$0.2

$0.2

$0.9

$0.1

$0.1

Research & Development
General & Administrative
Other Expenses

Operating Income
Operating Margin

Non-Operating Expenses (Net)

Pre-Tax Income($14.1)($2.9)($2.9)($3.8)($4.0)($13.6)($15.9)($17.4)

Income Taxes Paid

$0

$0

$0

$0

$0

$0

$0

$0

Tax Rate

0%

0%

0%

0%

0%

0%

0%

0%

($14.1)($2.9)($2.9)($3.8)($4.0)($13.6)($15.9)($17.4)Net Income
Net Margin

Reported EPS
YOY Growth

Basic Shares Outstanding
Source: Zacks Investment Research, Inc.

-

-

-

-

-

-

-

-

($0.29)($0.06)($0.06)($0.08)($0.08)($0.28)($0.32)($0.35)

-

-

-

-

-

-

-

-

49.04549.04649.04649.05049.05049.04849.20049.500David Bautz, PhD© Copyright 2023, Zacks Investment Research. All Rights Reserved.

HISTORICAL STOCK PRICE

Source: Zacks Small Cap Research© Copyright 2023, Zacks Investment Research. All Rights Reserved.

DISCLOSURESThe following disclosures relate to relationships between Zacks Small-Cap Research (“Zacks SCR”), a division of Zacks Investment Research(“ZIR”), and the issuers covered by the Zacks SCR Analysts in the Small-Cap Universe.
ANALYST DISCLOSURES
I, David Bautz, PhD, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject
securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or
views expressed in this research report. I believe the information used for the creation of this report has been obtained from sources I considered
to be reliable, but I can neither guarantee nor represent the completeness or accuracy of the information herewith. Such information and theopinions expressed are subject to change without notice.

INVESTMENT BANKING AND FEES FOR SERVICES
Zacks SCR does not provide investment banking services nor has it received compensation for investment banking services from the issuers of
the securities covered in this report or article.
Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm
engaged by the issuer for providing non-investment banking services to this issuer and expects to receive additional compensation for such noninvestment banking services provided to this issuer. The non-investment banking services provided to the issuer includes the preparation of thisreport, investor relations services, investment software, financial database analysis, organization of non-deal road shows, and attendance fees
for conferences sponsored or co-sponsored by Zacks SCR. The fees for these services vary on a per-client basis and are subject to the number
and types of services contracted. Fees typically range between ten thousand and fifty thousand dollars per annum. Details of fees paid by thisissuer are available upon request.

POLICY DISCLOSURESThis report provides an objective valuation of the issuer today and expected valuations of the issuer at various future dates based on applying
standard investment valuation methodologies to the revenue and EPS forecasts made by the SCR Analyst of the issuer’s business.
SCR Analysts are restricted from holding or trading securities in the issuers that they cover. ZIR and Zacks SCR do not make a market in any
security followed by SCR nor do they act as dealers in these securities. Each Zacks SCR Analyst has full discretion over the valuation of theissuer included in this report based on his or her own due diligence. SCR Analysts are paid based on the number of companies they cover.
SCR Analyst compensation is not, was not, nor will be, directly or indirectly, related to the specific valuations or views expressed in any report or
article.

ADDITIONAL INFORMATION
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CANADIAN COVERAGE
This research report is a product of Zacks SCR and prepared by a research analyst who is employed by or is a consultant to Zacks SCR. The
research analyst preparing the research report is resident outside of Canada, and is not an associated person of any Canadian registeredadviser and/or dealer. Therefore, the analyst is not subject to supervision by a Canadian registered adviser and/or dealer, and is not required tosatisfy the regulatory licensing requirements of any Canadian provincial securities regulators, the Investment Industry Regulatory Organization of
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