Cautious Optimism: Hold Rating on Merus Amid Promising Yet Inconclusive Phase II Data for Petosemtamab

William Blair analyst Matt Phipps has maintained their neutral stance on MRUS stock, giving a Hold rating today.

Matt Phipps has given his Hold rating due to a combination of factors related to Merus’s recent Phase II data presentation on petosemtamab in metastatic colorectal cancer. The data, although promising, involved a small patient cohort and limited follow-up, which makes it difficult to draw definitive conclusions at this stage. The initial response rates, particularly in first-line and second-line chemotherapy combination arms, were noteworthy, but the lack of confirmed responses necessitates further investigation.
The decision on the future development of petosemtamab will be taken over by Genmab, and while Merus management is optimistic about the initial signals, the need for expanded cohorts and longer follow-up is evident. The investor expectations were high, aiming for an objective response rate exceeding that of Rybrevant. Although petosemtamab showed strong clinical activity signals, the absence of confirmation for several responders suggests that more data is required before a more definitive investment recommendation can be made.