Merus stock price target raised to $110 at BMO Capital

Published 24/05/2025, 11:36
Merus stock price target raised to $110 at BMO Capital

On Friday, BMO Capital Markets increased its price target on Merus N.V. (NASDAQ:MRUS) shares, moving the goalpost to $110 from the previous $96, while maintaining an Outperform rating on the stock. The revision follows the release of promising Phase 2 data for Merus’s drug candidate, petosemtamab, in combination with pembrolizumab (pembro) for the treatment of recurrent or metastatic Head and Neck Squamous Cell Carcinoma (HNSCC). According to InvestingPro data, analyst targets for Merus range from $59 to $110, with a strong consensus recommendation of 1.24 (where 1 is a Strong Buy).

The updated data, which was presented at the American Society of Clinical Oncology (ASCO), featured results from a February 27, 2025, analysis of 43 evaluable patients. The study reported a confirmed Objective Response Rate (ORR) of 63%, showcasing strong and durable responses. Notably, the 12-month Overall Survival (OS) data indicated a survival rate of 79%. This compares favorably to the standard of care pembrolizumab, which has a reported survival rate of about 50-59%. The company, currently valued at $3.82 billion, holds more cash than debt on its balance sheet, with a healthy current ratio of 5.86, as reported by InvestingPro.

The analyst at BMO Capital, Evan David Seigerman, expressed increased confidence in the drug’s potential for approval in treating HNSCC, citing the robust data. The confidence level in the drug’s approvability has been adjusted upward to 90% from the previous 85%, prompting the revised price target.

Merus’s stock performance is closely tied to the development of its clinical programs. The positive data from the ASCO presentation and the subsequent price target increase reflect the market’s recognition of the potential value that petosemtamab could bring to the treatment landscape for HNSCC. The stock has demonstrated remarkable momentum, posting a 32.68% return in the past week alone. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value. InvestingPro subscribers have access to 15 additional exclusive tips and comprehensive financial metrics for Merus, along with detailed Pro Research Reports available for over 1,400 US stocks.

Investors and stakeholders in the biopharmaceutical sector often look to updates from clinical trials and the perspectives of financial analysts to gauge the progress and potential of new therapies. The latest developments for Merus are a significant indicator of the company’s forward momentum in its clinical endeavors.

In other recent news, Merus N.V. has reported significant developments in its ongoing clinical trials and corporate activities. The company presented promising results from its Phase 2 study combining Peto with Pembro, showcasing a 79% 12-month overall survival rate. This has led Truist Securities to maintain a Buy rating on Merus with a price target of $88, emphasizing the treatment’s potential as a best-in-class option. Additionally, Stifel analysts have reiterated their Buy rating with a $93 price target, citing Merus’s strategic positioning in the oncology sector and the promising data validated by the FDA’s Breakthrough Therapy Designation.

Merus also held its annual general meeting, where shareholders approved key proposals, including the adoption of the Dutch statutory annual accounts for 2024 and the appointment of KPMG as the external auditor for 2025. The re-appointment of board members Anand Mehra, M.D., and Maxine Gowen, Ph.D., was confirmed, alongside the authorization for the board to acquire company shares. Furthermore, Merus announced the publication of the mechanism of action for its investigational cancer therapy, petosemtamab, in the journal Cancers, highlighting its potential in treating colorectal cancer and other solid tumors.

The company’s management expressed optimism about the upcoming data presentation for Peto + Pembro at the ASCO conference, which is anticipated to exceed market expectations. Insights from ongoing studies suggest that Merus is well-positioned to demonstrate effectiveness in colorectal cancer, with results expected in the second half of 2025. These developments have generated growing investor interest, with analysts predicting a positive market response to Merus’s advancements in cancer treatment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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