2023 年 5 月 31 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 5 月 30 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。
【Zacks Small-Cap Research 公式 web サイト】
https://scr.zacks.com/※当該レポートは、本書の下部にございますので、スクロールしてご確認ください。

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/

May 30, 2023
David Bautz, PhD
312-265-9471
dbautz@zacks.com

Zacks Small-Cap Research
Sponsored – Impartial - Comprehensivescr.zacks.com

10 S. Riverside Plaza, Chicago, IL 60606

MediciNova, Inc.

(MNOV-NASDAQ)MNOV: Compelling Buying Opportunity in
Differentiated Small-Cap Biotech…

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 $27.00/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 (05/30/23)
Valuation$2.19$27.00

MediciNova, Inc. (MNOV) recently filed form 10-Q withfinancial results for the first quarter of 2023. We believethat MediciNova represents a compelling buying
opportunity as there are a number of attributes thatdifferentiate it from other small-cap biotech companies:1) The company has a strong balance sheet, withapproximately $55 million in cash and no debt as ofMarch 31, 2023 (likely enough to fund operations into2027); 2) A large and diverse pipeline – the company
currently has 11 programs in clinical development; and3) Credible management – MediciNova has aconsistent track record of under promising and overdelivering for company goals. These factors help thecompany stand apart from a crowded small-cap biotech
sector that continues to experience turbulence.

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

$2.66
$1.95
-14.060.99
13,295

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

49$105
N/A2517

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

$0.00
0.00
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

Risk Level
Type of Stock
Industry

Below Avg.
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

0E

0E

0E

0E

2024

0E

2025

0E

Earnings per Share2022
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-$0.07 E-$0.08 E-$0.08 E-$0.29 E-$0.32 E-$0.35 E

WHAT’S NEW
Business Update
Positive Attributes Make MediciNova a Compelling Buying Opportunity
MediciNova, Inc. (MNOV) is a biopharmaceutical company focused on developing small molecule therapies
for treating a range of diseases with high unmet medical need. With the biotechnology sector continuing toface a number of headwinds, we feel now is the time for investors to focus on companies that have the best
opportunity in the years ahead. We believe MediciNova has a number of compelling attributes that set it apartfrom other small-cap biotechnology companies.
1. Strong Balance Sheet – MediciNova exited the first quarter of 2023 with approximately $55.3 million
in cash and cash equivalents. Due to a low operating cash burn rate, we estimate this is enough tofund operations for at least the next four years. The financial markets continue to be difficult for smallcap biotech companies, and those looking to raise additional capital are typically needing to sellshares at a significant discount and/or with warrants that further dilute existing shareholders.
MediciNova will not need to raise additional capital for a substantial length of time, thus current
shareholders will not need to be too concerned with the possibility of near-term dilution or the stock
price reacting unfavorably to a stock sale. In addition, the company is focused on using its existing
resources in a fiscally prudent manner, including not spending money on or continuing projects thatare unlikely to be successful. MediciNova also has a very successful track record of securing grantfunding for many of its clinical trials including progressive MS, degenerative cervical myelopathy,
chemotherapy-induced peripheral neuropathy, methamphetamine dependence, opioid dependence,
alcohol dependence, and Long COVID.
2. Multiple ‘Shots on Goal’ – Unlike many biotechnology companies which have a limited pipeline
focused on one or two indications, MediciNova has a robust pipeline with multiple indications for its
two lead development compounds, MN-166 and MN-001, as shown in the following image:This diverse pipeline is important as it mitigates the risk of a major stock price crash due to a potential
failure of a single program. Over the years, countless biotechnology companies have lost 90% ormore of their stock value in a single day due to a failed clinical trial of their only program in clinicaldevelopment simply because they had no other programs of value. Unlike these biotechnology
companies, MediciNova is not a “one trick pony” and has plenty of indications to develop if one
program does not work out.

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Upcoming catalysts include topline data for Part 2 of the ongoing Phase 1/2 clinical trial of MN-166 inglioblastoma (GBM) and topline data for the Phase 2b clinical trial of MN-166 in alcohol use disorder(AUD).
•In January 2023, the company announced completion of enrollment for the GBM trial and in
February 2023 the company announced new data was presented regarding tumor tissue analysis
and clinical outcome from Part 1 of the study (the dose ranging portion of the trial). Part 2 of thestudy is evaluating the efficacy of MN-166 in combination therapy with temozolomide (TMZ).

•In January 2023, the company announced completion of enrollment in the Phase 2b clinical trial ofMN-166 in AUD. The trial is evaluating MN-166 as a potential treatment to decrease alcohol
consumption in treatment-seeking individuals diagnosed with AUD and is funded by the National
Institute on Alcohol Abuse and Alcoholism (NIAAA).

3. Credible Management – MediciNova takes a conservative approach to its investor relations strategy
which has resulted in a high level of management credibility. While many companies are continuallyrevising anticipated timelines and repeatedly missing their company goals, MediciNova has a trackrecord of under promising and over delivering on company goals. This strategy prevents situations
where stock sell offs occur due to the inability to meet pre-specified timelines or deliver on company
goals. In addition, MediciNova has a history of unexpected positive surprises such as the clinical trialof MN-166 for prevention of acute respiratory distress syndrome (ARDS) caused by COVID-19 which
had positive results, the BARDA contract to study MN-166 as a potential therapy for chlorine gasinduced ARDS and acute lung injury (ALI), and the grant-funded trial of MN-166 as a potential therapy
for Long COVID. Importantly, unlike many biotechnology companies, MediciNova does not hype lowprobability future events as it recognizes that doing so would lead to disappointed investors and alower stock price when the event does not materialize.
Financial Update
On May 11, 2023, MediciNova filed Form 10-Q with financial results for the first quarter of 2023. As expected,the company did not report any revenues in the first quarter of 2023. R&D expenses in the first quarter of 2023
were $1.5 million compared to $2.1 million in the first quarter of 2022. The decrease was primarily due to adecrease in MN-166 manufacturing expenses. G&A expenses in the first quarter of 2023 were $1.5 million
compared to $1.3 million in the first quarter of 2022. The increase was primarily due to increased non-cash
stock-based compensation.
Net cash used in operating activities was $3.2 million for the first quarter of 2023. MediciNova exited the firstquarter of 2023 with approximately $55.3 million in cash and cash equivalents. We estimate the company has
sufficient capital to fund operations for at least the next few years. As of May 9, 2023, the company had
approximately 49.0 million shares outstanding and when factoring in stock options a fully diluted share countof approximately 57.7 million.
Conclusion
We view MediciNova as a compelling investment opportunity at the current valuation, particularly given thevast number of opportunities present in its pipeline. There are numerous examples of one-drug/one-indicationcompanies that can lose up to 90% of their value in one day if a clinical trial is negative. We don’t see that as apossibility for MediciNova. In regards to upcoming catalysts, we look forward to topline data from Part 2 of thePhase 1/2 GBM trial and the Phase 2b AUD trial. With no changes to our model our valuation remains at $27.

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PROJECTED FINANCIALS
MediciNova Inc.
Income Statement

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

Total Revenues

Product Gross Margin ƬƬ  Operating MarginǦȋȌǦ  Net Income 
Tax Rate

Net Margin

Reported EPS
YOY Growth 

Source: Zacks Investment Research, Inc.

2022 A

Q1 A

Q2 E

Q3 E

Q4 E

2023 E2024 E2025 Ë́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ
̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ
̈́Ͳ̈́Ͳ̈́Ͳ

̈́Ͳ̈́Ͳ
̈́Ͳ̈́Ͳ
̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ

$0$0$0$0$0$0$0$0̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ̈́Ͳ-̈́ͻǤͳ̈́ͷǤͷ̈́Ͳ-̈́ͳǤͷ̈́ͳǤͷ̈́Ͳ--̈́ʹǤ͵̈́ͳǤͶ̈́Ͳ̈́ʹǤͷ̈́ͳǤͷ̈́Ͳ-̈́ʹǤ͸̈́ͳǤ͸̈́Ͳ-̈́ͺǤͻ̈́͸ǤͲ̈́Ͳ-̈́ͳͲǤͲ̈́͸ǤͲ̈́Ͳ-̈́ͳͳǤͲ̈́͸Ǥͷ̈́Ͳȋ̈́ͳͶǤ͸Ȍȋ̈́͵ǤͲȌȋ̈́͵Ǥ͹Ȍȋ̈́ͶǤͲȌȋ̈́ͶǤʹȌȋ̈́ͳͶǤͻȌȋ̈́ͳ͸ǤͲȌȋ̈́ͳ͹ǤͷȌȋ̈́ͳͶǤͳȌȋ̈́ʹǤͻȌȋ̈́͵ǤͷȌȋ̈́͵ǤͺȌȋ̈́ͶǤͲȌȋ̈́ͳͶǤʹȌȋ̈́ͳͷǤͻȌȋ̈́ͳ͹ǤͶȌ

($14.1)($2.9)($3.5)($3.8)($4.0)($14.2)($15.9)($17.4)-̈́ͲǤ͸
̈́Ͳ
0%-̈́ͲǤͲ̈́Ͳ
0%--̈́ͲǤʹ̈́ͲǤʹ̈́Ͳ̈́Ͳ0%0%-̈́ͲǤʹ̈́Ͳ
0%-̈́ͲǤ͸̈́Ͳ
0%-̈́ͲǤͳ̈́Ͳ
0%-̈́ͲǤͳ̈́Ͳ
0%--------($0.29)($0.06)($0.07)($0.08)($0.08)($0.29)($0.32)($0.35)--------ͶͻǤͲͶͷͶͻǤͲͶ͸ͶͻǤͲͷͲͶͻǤͲͷͲͶͻǤͲͷͲͶͻǤͲͶͻͶͻǤʹͲͲ

ͶͻǤͷͲͲDavid 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 orviews 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.
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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
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