If you are looking for an under-the-radar biotech with big upside potential, look no further.
Marinus Pharmaceuticals (NASDAQ:MRNS) is a cutting-edge stock with a critical focus. The biotech is developing ganaxolone to improve the lives of patients with epilepsy and neuropsychiatric disorders. This includes postpartum depression — a massive market opportunity.
Approximately 500,000 to 750,000 mothers suffer from postpartum depression annually in the US. However, according to a 2013 study, only about 15% of women seek treatment for the condition.
Mizuho Securities’ Difei Yang (Profile & Recommendations) is one of the Top 100 analysts ranked by TipRanks. She sees prices surging by almost 130%. She is extremely optimistic about the upcoming results of a Phase 2 study of ganaxolone IV in women with postpartum depression (PPD).
This trial data could have a big effect on share price. “We anticipate this will be an important catalyst for the shares” writes Yang. She continues “We see upside potential of 100%+ assuming convincing data including a clear dose response.” This would allow the drug to then enter Phase 3 trials.
And the best part is that the risk is relatively low: “We believe the downside is limited given the history of the compound and potential in other indications.”
Indeed, Marinus is following in the footsteps of larger biotech Sage Therapeutics (NASDAQ:SAGE). Ganaxolone is similar to Sage Therapeutics’ Brenaxolone. But this actually works in the stock’s favor. As Yang writes: “We see the recent positive data from Sage in PPD and major depressive disorder (MDD) as positive read-throughs for Marinus.”
Plus there is more than enough room for two players. While Marinus is a much smaller company, with a market cap of approx $180 mil compared to Sage’s ~$8bn, it can still create significant value as the second entrant in a market that has not seen major innovation in years.
Data due in mid-Q4
Marinus has had to delay the results release due to slower-than-expected patient enrollment. However, Yang remains upbeat. “With no change to the trial design, we are not concerned about the slippage on the timeline by a few weeks.”
Ultimately, the delay from Q3 to Q4 is ‘immaterial’ as “Given the complexity of clinical trials with multiple moving parts, it often is a very difficult task to predict the timing of a trial completion.”
Word on the Street
Overall, TipRanks reveals that this ‘Strong Buy’ stock has scored 4 recent Buy ratings. This is with an extremely bullish $16.75 average analyst price target (198% upside potential).
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