Merus: Buy Rating Affirmed on Promising Clinical Progress and Strong Financial Position

Needham analyst Ami Fadia reiterated a Buy rating on Merus (MRUS – Research Report) today and set a price target of $83.00.

Ami Fadia has given his Buy rating due to a combination of factors that highlight the potential growth and stability of Merus. The company is on track with its data update for the Phase 2 trial of Peto combined with pembrolizumab in first-line PD-L1 positive recurrent/metastatic head and neck squamous cell carcinoma, expected in the first half of 2025. Additionally, initial clinical data for Peto in combination with chemotherapy for first and second-line treatments, as well as monotherapy in third-line and beyond, in metastatic colorectal cancer, are anticipated.
Ami Fadia’s rating is also influenced by the progress in Phase 3 trials for Peto combined with pembrolizumab in first-line PD-L1 positive recurrent/metastatic head and neck squamous cell carcinoma, and Peto monotherapy in second and third-line recurrent/metastatic head and neck squamous cell carcinoma, which are expected to be substantially enrolled by the end of 2025. Furthermore, the management’s confidence in achieving an objective response rate endpoint that could support accelerated approval, along with overall survival data from the same study, adds to the positive outlook. The company’s current financial position, with cash and marketable securities projected to sustain operations into 2028, further supports the Buy rating.