BTIG starts Mersana Therapeutics at buy; PT $14

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BTIG launched coverage of Mersana Therapeutics (NASDAQ:MRSN) with a “buy” rating and $14 price target. The stock closed at $9.36 on April 28.

Mersana is focused on developing antibody-drug conjugates (ADCs) for cancer indications. The company currently has one program in the clinic: XMT-1536 for ovarian cancer and non-small cell lung cancer (NSCLC) adenocarcinoma.

XMT-1536 targets NaPi2b, a clinically validated target overexpressed on several important tumor types. Early data from XMT-1536 reveals dose-dependent anti-tumor activity in both ovarian cancer and NSCLC, writes analyst Thomas Shrader.

Mr. Shrader said the approximate 33% objective response rate seen in very late-line NaPi2b-high ovarian cancer patients “seems likely to be good enough for accelerated approval and should increase in earlier-line patients.” The NSCLC data also are extremely interesting, as the field is eagerly waiting for an ADC to pair with immunoncology in this large-market disease, he added.

“Overall, we see the reasons to own Mersana as the upcoming second half 2020 [Phase 1] data sets with 45 patients in both ovarian cancer and NSCLC, which we expect will de-risk XMT-1536 as an important therapeutic in both indications,” Mr. Shrader said. This data should provide additional upside by further validating the Mersana ADC platform and its application in the earlier-stage pipeline, he added.