MRUS Stock Overview
Merus N.V., a clinical-stage immuno-oncology company, engages in the discovery and development of bispecific antibody therapeutics in the Netherlands.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$20.97|
|52 Week High||US$33.09|
|52 Week Low||US$13.47|
|1 Month Change||-11.11%|
|3 Month Change||-14.51%|
|1 Year Change||-23.72%|
|3 Year Change||27.63%|
|5 Year Change||-0.14%|
|Change since IPO||108.87%|
Recent News & Updates
Merus GAAP EPS of -$0.13 beats by $0.49, revenue of $12.68M beats by $2.23M
Merus press release (NASDAQ:MRUS): Q2 GAAP EPS of -$0.13 beats by $0.49. Revenue of $12.68M (+2.4% Y/Y) beats by $2.23M.
Merus N.V. initiated with Buy at Stifel based on three bispecific antibodies
The shares of Dutch biotech Merus N.V. (NASDAQ:MRUS) added ~8% on Tuesday after Stifel initiated its coverage on the stock with a Buy recommendation as the analysts weighed in on the potential of thee of the company’s bispecific antibody candidates. Bispecific antibodies contain dual specificity in their binding arms and bind to two adjacent epitopes on a single target antigen, thereby raising the strength of the link. The analysts led by Bradley Canino point to near-term partnership potential of Merus’ (MRUS) solid tumor candidates Zenocutuzumab (MCLA-128) and MCLA-129 which is also undergoing studies for advanced non-small cell lung cancer. Despite a potentially weak Phase 1 data readout expected in 2H 2022 for the third asset MCLA-129 in head and neck cancer, the analysts cite the downside protection from Zenocutuzumab and MCLA-129. The two candidates command $400M and $525M peak sales potential in Stifel’s model, respectively compared to $200M for MCLA-129. The price target of $38 per share implying ~54% upside to the Merus’ (MRUS) Monday’s close, stands ~10% lower than the stock’s current average target on Wall Street.
Merus: Precision Oncology Pioneer Continues To Execute In The Clinic
Shares have risen by 40% since my 2020 ROTY update, but have lost a third of their value in 2022. I provide a recap of our thesis on this promising platform technology play in the oncology space. Data for Zeno in NRG1+ cancers at ASCO impressed with consistent ORR and clinical benefit (supportive of likely tumor agnostic label). Peto (EGFR LGR5) and c-MET drug candidates provide higher upside potential and more favorable risk/reward with data updates 2H 22. MRUS is a Buy. Key risks include disappointing data, high level of competition in EGFR and unfavorable partnership terms for potential collaborations (particularly commercial for Zeno). **This article was originally published for ROTY subscribers on May 2nd, but has been updated where necessary. Shares of Merus (MRUS) have risen by 40% since my June 2020 ROTY update and sport a 35% gain over the past 5 years. On the other hand, they've shed a third of their value since the start of 2022 (taking a significant hit along with the overall biotech sector). In ROTY's model account, I purchased a 3% portfolio weighting in late April and added to our position multiple times after oral presentation for Zeno (HER2 x HER3 bispecific antibody) in NRG1 fusion cancers at ASCO on June 5th proved encouraging. Let's move on to my update on this intriguing platform technology play and why it potentially has the kind of clinical momentum and asymmetric risk/reward profile that would allow me to keep holding patiently. Chart Finviz Figure 1: MRUS weekly chart When looking at charts, clarity often comes from taking a look at distinct time frames in order to determine important technical levels and get a feel for what's going on. In the weekly chart above, we can see shares rise above $30 in early 2021 after the license agreement was inked with Loxo Oncology/Eli Lilly (LLY). From there, shares again rebounded in October after promising responses were reported for Peto/MCLA-158 in HNSCC (head and neck squamous cell carcinoma) at the AACR-NCI-EORTC conference. Currently, shares are trying to regain the 20-day moving average on the weekly chart and have rebounded nicely post ASCO presentation of Zeno data. My initial take is that investors interested in the name would do well to purchase a pilot position presently and add more exposure on dips ahead of Peto readout later this year. Overview In my 2020 update, I touched on the following keys to our bullish thesis: I stated that the company's mission is to pursue unique bispecific and trispecific cancer candidates based on well characterized immunoglobulin format (very easy to manufacture, low immunogenicity risk, improved half-life). I also pointed out that Merus' lead candidates are novel (not "me too" treatments). Corporate Slides Figure 2: Pipeline MCLA-128 ((ZENO)) was thought to be the first HER3 targeting agent that's proven effective. Zeno uniquely blocks NRG1 heregulin interaction (these cancers typically don't have any other cancer driver mutations so they are truly driven by NRG1 gene fusion product and thus this particular MOA directly blocks this function). Early data in patients whose cancers harbored NRG1 fusions was promising, including partial responses in multiple pancreatic cancer patients as well as a NSCLC (non small cell lung cancer) patient. These subjects were heavily pretreated, including the latter with 6 prior lines of therapy. Importantly, the drug was well tolerated with a strong safety profile. Corporate Slides Figure 3: Zeno safety profile, mainly Grade 1 to 2 adverse events As for market opportunity, I pointed to company estimates of these fusions occurring in 0.3% to 3% of NSCLC, 0.5 to 1.5% of pancreatic cancer and less than 1% in other solid tumor types. AACR post on prevalence indicated market opportunity could be smaller (identified NRG1 fusions in approximately 0.2% of over 20,000 patients with diverse tumor types including 0.3% in patients with lung cancer). Following in the steps of precision oncology pioneers such as Loxo, management believed an efficient path to market exists via single arm enrichment study. As for MCLA-158, I noted that this first-in-class bispecific antibody is targeting LGLR5 (leucine-rich repeat-containing G protein-coupled receptor 5) and EGFR. For a frame of reference, I cited cetuximab (Erbitux) which at its peak achieved global sales of close to $2 billion despite a safety profile that left much to be desired (the rash comes to mind as one AE leading to dose reduction or treatment discontinuation). Corporate Slides Figure 4: Peto's innovative mechanism of action would appear to offer the best of both worlds, selectivity & efficacy, in preclinical models As for leadership, I noted that prior CEO and President Dr. Ton Logtenberg was stepping down with Dr. Sven Lundberg to succeed him. New CEO Lundberg appeared to have some relevant experience, including serving prior as Chief Scientific Officer at CRISPR Therapeutics and as Head of Translational Medicine at Alexion Pharmaceuticals. Thus, he seemed to be a good fit to take the company into its next stage of value creation. Two appointments to Board of Directors caught my interest, Dr. Anand Mehra (General Partner at Soffinova Investments) and Paolo Pucci (former CEO of ArQule, where he led an impressive turnaround that culminated with the $2.7 billion buyout by Merck). I also highlighted Dr Victor Sandor on the board, who served prior as Chief Medical Officer at Array BioPharma, which was acquired by Pfizer for $11.4 billion. Let's move onto my notes from Needham Virtual Conference webcast. Needham Notes CEO Bill Lundberg starts by highlighting the common light chain technology utilized in Merus' Biclonics and Triclonics, which allows them to produce monoclonals out of a single cell. For Zeno, they met with the FDA at the end of last year, aligning on NRG1 fusion cancers being a population that could receive a drug approval and that the company's ongoing clinical program could support such a filing (if efficacy and number of patients is sufficient). Lundberg expects they have aligned with the FDA and will have sufficient enrollment and patient follow up to support BLA filing. This is a competitive space, but there have been 5 prior approvals for tumor agnostic setting for solid tumors (among them, response rates ranged from 29% to 75% with durability of 5 months all the way to 1 year). If data is consistent with that range, they have potential for BLA filing. They did discuss specific, granular numbers with the FDA but have chosen not to share them for competitive reasons. As for Zeno's commercial opportunity (challenge of finding and identifying these patients), they have been successful enrolling 100+ patients in study which for uncommon tumor type is promising. The general trend toward personalized medicine should provide a tailwind as well (molecular panels already include NRG1). If patients have RAS wild type mutation, that is a smaller subtype in which NRG1 fusions almost exclusively occur. More recently, they have been able to enroll virtually every patient on the eNRGy trial instead of Early Access Program (as Covid has let up some). One key caveat is that Lundberg is "hopeful" the data package would be supportive of regulatory filing, but this sounds far from certain. As for MCLA-158 (Peto), Lundberg notes that LGR5 is not typically expressed after birth (small subsets of cancer stem cells express the target as do certain cancer subtypes including colorectal, head & neck, gastric esophageal). These 3 cohorts are what they're interested in testing the drug in. In fall of last year, they presented early data on an initial cohort of previously treated HNSCC patients. 7 of 10 patients reached their first tumor evaluation, and all 7 had tumor shrinkage with 3 partial responses (1 PR deepened to complete response after data cutoff date). Keep in mind these patients with 2 prior lines of therapy are treated typically with a platinum and a biologic, with few good options after that (historical response rate for cetuximab is just 13%). Corporate Slides Figure 5: Peto's early clinical activity in HNSCC As for other tumor types, Lundberg says they have another cohort of gastric esophageal that they will present at the same conference as updated HNSCC results. Protocol allows for enrolling up to 40 patients for HNSCC. The caveat is again it's early in the study and we need to see strong signal in higher number of patients. Moving onto MCLA-129 (EGFR c-MET bispecific antibody), they started developing it several years ago when it became clear that one major mechanism of resistance to EGFR targeting drugs was activation of MET pathway. The drug entered clinic in Q2 last year in phase 1/2 dose escalation study. AACR poster demonstrated preclinical data, showing the antibody blocks mechanism of action for EGFR and c-MET. The drug also induces ADCC and ADCP which rely on host immune system to kill cancer cells. MCLA-129 also blocks the growth of cancer in mouse model with EGFR exon20 mutation. Corporate Slides Figure 6: MCLA-129 supportive preclinical data As for competition and differentiation, Johnson & Johnson's (JNJ) Rybrevant is already on the market and also binds to EGFR/c-MET. MCLA-129 appears to have similar affinity to both targets, whereas Rybrevant binds tighter to c-MET (more similar affinities gives wider therapeutic window generally speaking). 129 is also fully ADCC-enhanced, Rybrevant may only be half-ADCC enhanced. 129 is produced from a single cell (advantages of monoclonal antibody production), whereas Rybrevant must be produced through making two monospecific antibodies then mixing them together in a costly and time-consuming process. It's too early to state whether MCLA-129 has an advantage in safety or efficacy (or merely similar in base case scenario). The goal is to find the recommended phase 2 dose, evaluate early evidence of efficacy in multiple cohorts to decide where they should invest in (early evidence suggests pursuit of additional indications outside of NSCLC as well). Moving onto MCLA-145 (PD-L1 x CD137), expectations are low here considering that in January partner Incyte decided to opt out continued development. Early data was presented in December where they demonstrated 25mg range is the right range. They also believe they are not fully blocking PD-L1/PD1 access, so the drug could work better with full blockade (combine with PD-1 drug). Their trispecific TriClonics platform provides same technical advantages (being able to produce out of a single cell). Third binding domain adds complexity and could have technical advantages for a number of indications (active research here, but keeping new molecules under wraps it would seem). As for the balance sheet, they reported $430 million in cash at end of 2021 which will take them beyond 2024. Lundberg hints that partnerships could be appropriate for certain assets (which makes me think he's talking about c-MET) in being realistic about what late-stage studies and commercialization they can approve on their own. Other Information For Q1, the cash balance was $384M (down from $430.8M at December 31st). Net loss rose to $18.9M, while R&D rose by $6.2M to $27M. G&A rose by $2.4M to $11.75M. Management is guiding for operational runway beyond 2024. Key milestones remain unchanged, including data updates for Peto (Lgr5 x EGFR) and MCLA-129 (EGFR x c-MET) in the second half of the year. Here are a couple nuggets from May 24th Wainwright webcast: Peto (EGFR x LGR5) they saw 3 clinical responses out of 7 evaluable HNSCC patients in early data, with all 7 showing signs of tumor shrinkage. They will be providing update on HNSCC cohort 2H 22 (interesting that they don't mention gastric this time). Platform allows them to develop large inventory of diverse panel of common light chain antibodies against numerous targets. They can evaluate thousands of multi-specific antibodies in parallel using robotics and automation, then evaluate them in screening to identify best candidates for clinical application (does not guarantee success but gives them higher probability of success). On May 26th, the company announced publication of Zeno data in phase 1/2 eNRGY trial via abstract on ASCO website. Of 73 evaluable patients, a very respectable 34% overall response rate was observed with median duration of response ((DOR)) of 9.1 months. 35% response rate in NSCLC and 39% ORR in pancreatic cancer appears approvable to my eyes (well within FDA guidance). Breast cancer 2/4 responders and cholangiocarcinoma 1/3 responders also looks good, a caveat is the low number of patients. Corporate Slides Figure 7: Zeno shows broad activity across multiple NRG1+ tumor types Merus is well ahead of competitor Elevation Oncology, who enrolled just 15 patients in its CRESTONE study so far though the 33% response rate for seribantumab lines up well with Zeno (mainly NSCLC patients, only 1 pancreatic). ASCO oral update (see slides) contained little in the way of surprises, with 34% overall response rate in 79 evaluable patients. Pancreatic cancer (PDAC) response rate increased from 39% in prior abstract to 42%, which is good to see. Importantly, as noted prior, the company remains 2+ years ahead of competition in NRG1+ tumors.
|MRUS||US Biotechs||US Market|
Return vs Industry: MRUS underperformed the US Biotechs industry which returned -19.3% over the past year.
Return vs Market: MRUS underperformed the US Market which returned -18.8% over the past year.
|MRUS Average Weekly Movement||8.0%|
|Biotechs Industry Average Movement||11.1%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.9%|
Stable Share Price: MRUS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.
Volatility Over Time: MRUS's weekly volatility (8%) has been stable over the past year.
About the Company
Merus N.V., a clinical-stage immuno-oncology company, engages in the discovery and development of bispecific antibody therapeutics in the Netherlands. Its bispecific antibody candidate pipeline includes Zenocutuzumab (MCLA-128), which is in a phase 2 clinical trials for the treatment of patients with metastatic breast cancer, as well as in Phase 1/2 clinical trials for the treatment of solid tumors that harbor Neuregulin 1. The company is also developing MCLA-158, which is in a phase I clinical trial for the treatment of solid tumors; MCLA-145, which is in phase 1 clinical trials for the treatment of solid tumors; MCLA-129, which is in phase 1/2 clinical trials for the treatment of patients with advanced non-small cell lung cancer and other solid tumors; and ONO-4685 that is Phase 1 clinical trial to treat relapsed/refractory T cell lymphoma.
Merus Fundamentals Summary
|MRUS fundamental statistics|
Is MRUS overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|MRUS income statement (TTM)|
|Cost of Revenue||US$110.84m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||-1.17|
|Net Profit Margin||-102.21%|
How did MRUS perform over the long term?See historical performance and comparison
Is MRUS undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 3/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for MRUS?
Other financial metrics that can be useful for relative valuation.
|What is MRUS's n/a Ratio?|
Price to Sales Ratio vs Peers
How does MRUS's PS Ratio compare to its peers?
|MRUS PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
EBS Emergent BioSolutions
EDIT Editas Medicine
Price-To-Sales vs Peers: MRUS is expensive based on its Price-To-Sales Ratio (18.2x) compared to the peer average (12.3x).
Price to Earnings Ratio vs Industry
How does MRUS's PE Ratio compare vs other companies in the US Biotechs Industry?
Price-To-Sales vs Industry: MRUS is expensive based on its Price-To-Sales Ratio (18.2x) compared to the US Biotechs industry average (14x)
Price to Sales Ratio vs Fair Ratio
What is MRUS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||18.2x|
|Fair PS Ratio||2.2x|
Price-To-Sales vs Fair Ratio: MRUS is expensive based on its Price-To-Sales Ratio (18.2x) compared to the estimated Fair Price-To-Sales Ratio (2.2x).
Share Price vs Fair Value
What is the Fair Price of MRUS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: MRUS ($20.97) is trading below our estimate of fair value ($165.96)
Significantly Below Fair Value: MRUS is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Merus forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: MRUS is forecast to remain unprofitable over the next 3 years.
Earnings vs Market: MRUS is forecast to remain unprofitable over the next 3 years.
High Growth Earnings: MRUS is forecast to remain unprofitable over the next 3 years.
Revenue vs Market: MRUS's revenue (47.2% per year) is forecast to grow faster than the US market (7.6% per year).
High Growth Revenue: MRUS's revenue (47.2% per year) is forecast to grow faster than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: MRUS is forecast to be unprofitable in 3 years.
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How has Merus performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: MRUS is currently unprofitable.
Growing Profit Margin: MRUS is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: MRUS is unprofitable, and losses have increased over the past 5 years at a rate of 3.4% per year.
Accelerating Growth: Unable to compare MRUS's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: MRUS is unprofitable, making it difficult to compare its past year earnings growth to the Biotechs industry (29.2%).
Return on Equity
High ROE: MRUS has a negative Return on Equity (-16.5%), as it is currently unprofitable.
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How is Merus's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: MRUS's short term assets ($398.8M) exceed its short term liabilities ($60.3M).
Long Term Liabilities: MRUS's short term assets ($398.8M) exceed its long term liabilities ($57.9M).
Debt to Equity History and Analysis
Debt Level: MRUS is debt free.
Reducing Debt: MRUS had no debt 5 years ago.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: Insufficient data to determine if MRUS has enough cash runway based on its current free cash flow.
Forecast Cash Runway: Insufficient data to determine if MRUS has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.
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What is Merus's current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Merus Dividend Yield vs Market|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Biotechs)||2.8%|
|Analyst forecast in 3 Years (Merus)||0%|
Notable Dividend: Unable to evaluate MRUS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate MRUS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if MRUS's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if MRUS's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as MRUS has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Bill Lundberg (59 yo)
Dr. Sven Ante Lundberg, also known as Bill, M.D., serves as Chief Executive Officer, President and Principal Financial Officer of Merus N.V. since December 31, 2019 and has been its Director since June 201...
CEO Compensation Analysis
|Bill Lundberg's Compensation vs Merus Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$8m||US$582k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$5m||US$565k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$162k||n/a|
Compensation vs Market: Bill's total compensation ($USD7.54M) is above average for companies of similar size in the US market ($USD3.98M).
Compensation vs Earnings: Bill's compensation has increased whilst the company is unprofitable.
Experienced Management: MRUS's management team is considered experienced (2.8 years average tenure).
Experienced Board: MRUS's board of directors are considered experienced (4.2 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: MRUS insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|25 Aug 22||SellUS$4,014||Harry Shuman||Individual||165||US$24.33|
|08 Oct 21||SellUS$31,222,474||BVF Partners L.P.||Company||1,132,714||US$27.79|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.2%.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Merus N.V.'s employee growth, exchange listings and data sources
- Name: Merus N.V.
- Ticker: MRUS
- Exchange: NasdaqGM
- Founded: 2003
- Industry: Biotechnology
- Sector: Pharmaceuticals & Biotech
- Implied Market Cap: US$962.065m
- Shares outstanding: 45.88m
- Website: https://www.merus.nl
Number of Employees
- Merus N.V.
- Yalelaan 62
- 3584 CM
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|MRUS||NasdaqGM (Nasdaq Global Market)||Yes||Common Stock||US||USD||May 2016|
|2GH||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||May 2016|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/06 00:00|
|End of Day Share Price||2022/10/06 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.