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Shares of MediciNova (NASDAQ: MNOV) soared on Wednesday after the biopharmaceutical company announced a collaboration with the U.S. Department of Health and Human Services (HHS).
By the close of trading, MediciNova’s stock price was up 54% after having been up by as much as 90% earlier in the day.
MediciNova will work with the HHS’s Biomedical Advanced Research and Development Authority (BARDA) to evaluate whether the biotech’s MN-166 (ibudilast) compound could serve as a medical countermeasure against chlorine gas-induced lung damage.
BARDA will fund proof-of-concept studies of MN-166. The compound is the first to receive development support from BARDA’s new Repurposing Drugs in Response to Chemical Threats (ReDIRECT) program.
Investors bid up MediciNova’s share price on Wednesday. Image source: Getty Images.
MediciNova Chief Medical Officer Kazuko Matsuda said MN-166 has shown an ability to lessen pulmonary edema — a condition caused by excess fluid in the lungs — in an acute respiratory distress syndrome (ARDS) animal model. MN-166 also protected against injury by reducing cell death in lung tissue.
“Considering that pulmonary edema is a hallmark feature of exposure to chlorine, MN-166 has the potential to improve health outcomes and save lives,” Matsuda said in a press release.
Analysts see plenty of gains ahead for MediciNova’s shareholders. For one, Maxim Group analyst Jason McCarthy placed a buy rating on the biotech’s stock on Wednesday. He asserts that MediciNova’s compounds could be applicable to a broad array of maladies, including neurodegenerative and liver diseases, as well as certain forms of cancer. Based on that, McCarthy expects MediciNova’s stock price could surge to $15 in the next year — about 72% higher than the $8.74 a share price where it ended trading Wednesday.
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