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Minerva Neurosciences: Why I Think This Underperforming IPO Is A Buy
- Minerva Neurosciences (NERV) has been beaten down substantially over the past two months with no significant negative news.
- The company's pipeline assets address important niches in the neuropsychiatric space and have numerous catalysts over the next few months.
- Given the impressive players involved, the numerous catalysts over the next two quarters, and unlikelihood of dilution in the next six months, I am initiating Minerva Neurosciences with a buy.
Quiet Period Expiration For Minerva Neurosciences IPO: Short-Term Buying Window
- July 25 will conclude the 25 day, SEC-enforced quiet period on underwriter research on NERV.
- On July 26th, NERV's underwriters will likely release detailed positive reports, leading to at least a temporary rise in NERV prices.
- NERV's post-IPO market performance has been inconsistent, bouncing between $5.75 per share and $7.54 per share.
- Given that each of NERV's product candidates is at an early clinical stage, we feel that the firm has an unclear future; however, this event offers a short-term buying opportunity.
- The Minerva IPO got done at $6 - a 50% discount to the filing range.
- Commercial success is a way off, but they are targeting schizophrenia, depression, insomnia, and Parkinson's disease - all big opportunities.
- If either one of their Phase IIB trials is positive the current $114M market capitalization will look very cheap.
- There is no near-term catalyst here, but the shares are worth keeping on the radar screen.
- NERV is a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of central nervous system product candidates.
- NERV has completed Phase 1 clinical trials.
- The price-to-book is 2, which is very low for a biopharma.
- NERV is a clinical-stage biopharmaceutical firm seeking to develop and commercialize products for the treatment of central nervous system diseases.
- NERV has yet to generate revenue, given many product candidates are in early stages of development; even if these do gain regulatory approval, they will face stiff competition.
- We are neutral on this IPO, as NERV's products are diverse and high demand exists for them; however, commercial is not yet clear at this stage.
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