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CAMBRIDGE, Mass. - Mersana Therapeutics, Inc. (NASDAQ:MRSN) announced Thursday it will implement a 1-for-25 reverse stock split effective July 25, 2025, as the clinical-stage biopharmaceutical company seeks to regain compliance with Nasdaq’s minimum bid price requirement. The announcement comes as the stock has declined over 80% in the past year, according to InvestingPro data.
The reverse split, which was approved by stockholders at the company’s Annual Meeting on June 12, will reduce Mersana’s outstanding common shares from approximately 124.8 million to 5.0 million. The company’s stock is expected to begin trading on a split-adjusted basis when markets open on July 28 under the same ticker symbol. InvestingPro analysis suggests the stock is currently undervalued, with a current market capitalization of approximately $50.5 million.
The consolidation will not change the number of authorized shares or the par value of the common stock. Proportionate adjustments will be made to shares available under equity incentive plans and to outstanding equity awards.
No fractional shares will be issued as a result of the split. Instead, stockholders entitled to fractional shares will receive cash payments in lieu of those shares.
Stockholders holding shares electronically will not need to take action to receive post-split shares. Those owning shares through banks or brokers will have their positions adjusted automatically.
Mersana Therapeutics focuses on developing antibody-drug conjugates for cancer treatment. Its pipeline includes Emi-Le (emiltatug ledadotin; XMT-1660), targeting B7-H4, and XMT-2056, targeting a novel epitope of human epidermal growth factor receptor 2. According to InvestingPro data, the company maintains a healthy current ratio of 1.83 and holds more cash than debt on its balance sheet, though analysts note it is quickly burning through cash. Get access to 10+ additional exclusive ProTips and comprehensive analysis through InvestingPro’s detailed Research Reports, available for 1,400+ top US stocks.
The information in this article is based on a company press release statement.
In other recent news, Mersana Therapeutics reported its first-quarter 2025 earnings, revealing a net loss of $24.1 million, which aligns with analysts’ expectations of an EPS of -0.19. Despite the revenue falling short of forecasts, the company is focusing on its breast cancer treatment pipeline. Additionally, Mersana announced promising interim results from a Phase 1 clinical trial of its drug candidate emiltatug ledadotin (Emi-Le; XMT-1660), presented at the American Society of Clinical Oncology Annual Meeting. The trial showed a 31% objective response rate in patients with B7-H4 high tumors at intermediate doses. Notably, in patients with adenoid cystic carcinoma type 1, the objective response rate reached 56%.
Truist Securities responded to these developments by raising its price target for Mersana shares to $10, maintaining a Buy rating. The firm’s positive reception is attributed to the recent clinical advancements and strategic restructuring efforts by Mersana. The investigational therapy Emi-Le has shown promise, particularly in patients with high B7-H7 expression. These developments highlight Mersana’s ongoing efforts in advancing cancer treatment options.
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