On Monday, Citi maintained a Buy rating on Merus N.V. (NASDAQ: NASDAQ:MRUS) and increased the price target to $97 from $89, reflecting growing confidence in a company that has delivered an impressive 86.5% return over the past year. According to InvestingPro data, analyst targets now range from $67 to $109, with a strong consensus Buy rating of 1.25.
This adjustment follows the presentation of new data on petosemtamab monotherapy in second-line or more recurrent/metastatic Head and Neck Squamous Cell Carcinoma (r/m HNSCC) at the ESMO Asia conference.
The recent data showcased at the conference revealed a roughly 36% objective response rate (ORR) at the 1500 mg dosage in 75 patients, with the cutoff date being July 5, 2024.
The analyst noted that these findings align with previous data presented at the AACR™23, reinforcing confidence in the 1500 mg dosage for Phase 3 trials in both first-line and second-line settings. InvestingPro analysis shows the company maintains a strong financial position with more cash than debt and a healthy current ratio of 8.32, providing runway for its clinical programs.
The positive trial results have been seen as a validation of petosemtamab's dual blockade of EGFR and LGR5, a combination that appears to offer clinical benefits not achievable with cetuximab alone. The analyst emphasized that the safety and efficacy profile of petosemtamab monotherapy is now well-established.
In light of these developments, Citi has updated its model to reflect a higher conviction in the drug's potential for treating second-line HNSCC. The recent approval of zenocutuzumab (Bizengri) also contributed to the revised price target. The firm continues to categorize Merus as a Buy/High Risk (1H) investment. With a market capitalization of $3 billion and multiple catalysts ahead, investors can access detailed financial analysis and 12 additional ProTips through InvestingPro's comprehensive research reports.
In other recent news, Merus N.V. has seen significant developments across its oncology portfolio. The U.S. Food and Drug Administration (FDA) has approved BIZENGRI® (zenocutuzumab-zbco) for the treatment of certain advanced cancers. This marks the first approval of a therapy specifically targeting NRG1 gene fusions. Moreover, Merus has entered into a strategic licensing agreement with Partner Therapeutics, Inc. for the development and commercialization of zenocutuzumab, with the potential to receive up to $130 million in milestone payments.
Several analyst firms, including Guggenheim, BMO Capital Markets, H.C. Wainwright, Goldman Sachs, and UBS, have maintained positive ratings for Merus. Guggenheim has affirmed a Buy rating and set a price target of $109, while BMO Capital Markets has maintained an Outperform rating with a steady price target of $95.
Merus's product, petosemtamab, is showing promise as a therapy for head and neck squamous cell carcinoma, with a Phase 3 trial currently underway. The FDA has extended the Prescription Drug User Fee Act goal date for the review of Merus's Biologics License Application for zenocutuzumab to February 4, 2025.
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