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On Friday, BMO Capital Markets updated its outlook on Merus N.V. (NASDAQ:MRUS), a clinical-stage oncology company, by increasing the price target to $96 from the previous $95 while retaining an Outperform rating on the stock. The revision follows Merus’s recent business update, which provided narrowed timelines for upcoming clinical data on its leading drug candidate, petosemtamab. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $67 to $109, suggesting significant upside potential from the current price of $45.49.
Merus N.V. has guided that additional Phase 2 first-line Head and Neck Squamous Cell Carcinoma (HNSCC) data will be available in the first half of 2025, with initial Phase 2 data for third-line or higher Colorectal Cancer (CRC) expected in the second half of the same year. BMO Capital’s analyst highlighted petosemtamab as the key value driver for Merus heading into 2025. The company maintains a strong financial position with a current ratio of 8.32, holding more cash than debt on its balance sheet.
The analyst’s commentary underscored the company’s strong positioning, owing to petosemtamab’s differentiated profile and partial de-risking through clinical development. This anticipation of significant clinical updates in 2025 was cited as a basis for the Outperform rating and the slightly higher target price.
The adjusted price target reflects an increased net present value (NPV) for petosemtamab. However, this increase was partially counterbalanced by reduced estimates for Bizgenri, another drug in Merus’s pipeline. The Outperform rating reaffirms BMO Capital’s positive outlook on Merus’s stock, suggesting confidence in the company’s future performance based on the potential of its lead clinical asset.
In other recent news, Merus N.V. has announced several significant developments that are drawing attention from investors. The U.S. Food and Drug Administration (FDA) has approved BIZENGRI® (zenocutuzumab-zbco) for treating certain advanced cancers with NRG1 gene fusions, marking the first approval of its kind. This approval is based on promising clinical trial results, with the drug expected to be available to patients in the United States soon. In another update, Merus has entered an exclusive licensing agreement with Partner Therapeutics for the commercialization of zenocutuzumab in the U.S., potentially earning up to $130 million in milestone payments.
Analysts have also weighed in on Merus’s potential, with Piper Sandler initiating coverage with an Overweight rating and an $84 price target, citing the promising prospects of the drug candidate petosemtamab. Wells Fargo (NYSE:WFC) echoed this sentiment, highlighting the potential of peto in metastatic colorectal cancer and setting a $91 price target. Citi raised its price target for Merus to $97, following positive trial data on petosemtamab monotherapy, reinforcing confidence in its efficacy for treating head and neck squamous cell carcinoma.
Guggenheim maintained its Buy rating on Merus, although it slightly lowered the price target to $109 due to the new licensing agreement with PTx. Despite this adjustment, the focus remains on petosemtamab’s potential as a best-in-class therapy. These recent developments underscore Merus’s ongoing efforts to advance its oncology pipeline and capitalize on emerging opportunities in the cancer treatment landscape.
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