MediciNova Stock Pops After Multiple Sclerosis Study Update

The biopharma outlined a Phase 3 study for its MS treatment, ibudilast

MediciNova, Inc. (NASDAQ:MNOV) stock is up 9% in electronic trading, after the California-based biopharmaceutical firm announced plans for a late-stage clinical trial for ibudilast in patients with progressive multiple sclerosis (MS). The company said it will conduct just one study, with the Food and Drug Administration (FDA) saying marketing approval could be given based on data from a single trial.

Today's expected pop could put the drug stock on track for its best day since early April, but runs counter to its longer-term trend. As of last night's close of $9.10, MNOV shares are down almost 32% since their May 16, 13-month high of $13.37. And while the equity has come off its mid-June low near $8.60, it was swiftly rejected by the round $10 level -- home to its 80-day moving average and a 50% Fibonacci retracement of a rally from its February bottom to its May peak.

Despite the stock's technical struggles, analysts are overwhelming bullish toward MNOV. While only two brokerages cover the equity, they both call it a "strong buy," while the average 12-month price target of $20 is a 120% premium to Thursday's close.

Short sellers, meanwhile, have started covering their bearish bets. Short interest declined 5.1% in the most recent reporting period to 3.51 million shares. This represents a healthy 10% of MediciNova stock's available float, or 28 times the average daily pace of trading.