Zacks Small-Cap Research Sponsored Impartial - …

Zacks Small-Cap Research

Sponsored ? Impartial - Comprehensive

March 12, 2020 David Bautz, PhD

312-265-9471 dbautz@

Sponsored ? Impartial - Comprehensive

scr.

MediciNova, Inc.

10 S. Riverside Plaza, Chicago, IL 60606

(MNOV-NASDAQ)

MNOV: MN-166 to be Developed as a Treatment for Severe Pneumonia and Acute Respiratory Distress Syndrome...

Based on our probability adjusted DCF model that takes into account potential future revenues from MN-166 in ALS, progressive MS and addiction and MN-001 in NASH and IPF, MNOV is valued at $24/share. This model is highly dependent upon continued clinical success of both MN-166 and MN-001 and will be adjusted accordingly based upon future clinical results.

Current Price (03/12/20) Valuation

$3.29 $24.00

OUTLOOK

On March 9, 2020, MediciNova, Inc. (MNOV) announced that MN-166 (ibudilast) will be developed for the treatment of severe pneumonia and acute respiratory distress syndrome (ARDS). The results of a recently performed preclinical study showed that MN166 is able to reverse histological changes observed in an ARDS mouse model including inflammation, hemorrhage, alveolar congestion, and alveolar wall edema. In addition, MN-166 treatment attenuated the secretion of inflammatory cytokines, reduced pulmonary edema, and reduced cell apoptosis in lung tissue. We believe MN-166 could be a novel treatment option for patients infected with the recently emerged coronavirus, which can result in the development of severe pneumonia and ARDS.

SUMMARY DATA

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

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

Annual Cash Dividend Dividend Yield (%)

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

P/E using TTM EPS P/E using 2018 Estimate P/E using 2019 Estimate

$13.37 $2.85 -61.92 1.64

105,070

44 $145 N/A

22 15

$0.00 0.00

N/A N/A N/A

N/A N/A N/A

Risk Level

Type of Stock Industry

Above Avg.

Small-Blend Med-Biomed/Gene

ZACKS ESTIMATES

Revenue

(In millions of $)

Q1

(Mar)

2019

0 A

2020

0 E

2021

2022

Q2 (Jun)

0 A 0 E

Earnings per Share

2019 2020 2021 2022

Q1 (Mar)

-$0.11 A -$0.08 E

Q2 (Jun)

-$0.09 A -$0.08 E

Q3 (Sep)

0 A 0 E

Q3 (Sep)

-$0.05 A -$0.09 E

Q4 (Dec)

0 A 0 E

Q4 (Dec)

-$0.04 A -$0.09 E

Year (Dec)

0 A 0 E 0 E 0 E

Year (Dec)

-$0.30 A -$0.34 E -$0.34 E -$0.35 E

? Copyright 2020, Zacks Investment Research. All Rights Reserved.

WHAT'S NEW

Business Update MN-166 to be Developed for Severe Pneumonia and ARDS On March 9, 2020, MediciNova, Inc. (MNOV) announced that based upon preclinical results that were recently published the company will develop MN-166 (ibudilast) as a treatment for severe pneumonia and acute respiratory distress syndrome (ARDS). ARDS results in 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 other serious 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 oxygen therapy supplied through a ventilator. There are no pharmacological treatments specifically for ARDS and approximately 40% of hospitalized patients die from it (Siegel et al., 2020). In a preclinical study, MN-166 was studied for its effectiveness on neonatal ARDS in a mouse model in which ARDS is induced with lipopolysaccharide (LPS) (Yang et al., 2020). Mice were divided into four groups of 10 each: a control group, a LPS-induced group, and two MN-166 treatment groups (3.75 and 7.5 mg/kg). The following figure shows that PDE4, which MN-166 is an inhibitor of, is increased by LPS stimulation and that treatment with MN-166 decreased this overexpression of PDE4 in lung tissue in ARDS mice.

In addition to decreasing the expression of PDE4, treatment with ibudilast also decreases the abnormal overexpression of different inflammatory cytokines, including TNF-a, IL-1b, IL-6, and MCP-1, and inflammatory chemokines, including CXCL1, CXCR4, and CXCR5.

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Pulmonary edema was evaluated using the pulmonary edema score to indicate the amount of water accumulation in the lungs after pulmonary damage. Pulmonary edema was significantly reduced by MN-166 treatment (P ................
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