Merus’s Promising Clinical Developments and Market Potential Justify Buy Rating

Analyst Tazeen Ahmad of Bank of America Securities maintained a Buy rating on Merus (MRUS – Research Report), retaining the price target of $92.00.

Tazeen Ahmad has given his Buy rating due to a combination of factors that highlight Merus’s promising developments in their clinical trials. The updated phase 2 data for petosemtamab combined with pembrolizumab in treating head and neck squamous cell carcinoma (HNSCC) showed a 79% 12-month overall survival rate, which surpassed expectations based on historical data for pembrolizumab alone. This significant survival rate, alongside a confirmed objective response rate of 63%, indicates a strong potential for the treatment’s efficacy, particularly in a population that typically exhibits low response rates.
Furthermore, the competitive positioning of Merus is strengthened by the potential for petosemtamab to achieve a median overall survival of approximately 30 months, as projected by key opinion leaders (KOLs). The trial’s all-comers design, which is not restricted by HPV status, suggests a broad market opportunity, potentially allowing Merus to capture a larger share of the first-line HNSCC market. If the phase 3 results replicate the phase 2 outcomes, Merus could be positioned as a best-in-class treatment, offering superior efficacy compared to competitors. These factors collectively reinforce the confidence in Merus’s commercial potential, justifying the Buy rating with a price objective of $92.

MRUS’s price has also changed moderately for the past six months – from $46.210 to $62.420, which is a 35.08% increase.