RE:MersanaThanks for that good info on Mersana. I took a quick look at it and thought I would share some of the financial/market info on it.
First, this stock hits its low of $1.32 in November 2019 but then, unlike TH, did not miss the 2020/21 bull market and rose all t he way to $27 as you indicated. Like many biotech and other high flying stocks, it has been crushed since Februray of 2021.
One reason it likely fully participated in the bubble nonsense is that it is followed by 7 US analysts, including JP Morgan, Bankers Trust and Cowen along with some lesser lights. The JP Morgan analyst raised her price target on it to $23 right around when the stock was peaking out and has progressively lowered her price target to the current $10 per share. Bankers trust still has a $26 price target on the stock. The average target price is $19 and only the JP Morgan analyst has a Hold rating on it, everyone else still rates it a Buy. One might also wonder how JP Morgan can rate it as a Hold when it expects the stock to appreciate by 150%, but that is Wall Street for you.
At the end of 2021, MRSN had $178 million in cash, $39 million in debt and had negative cash flow in 2021 of $140 milion. It had no revenues at all in 2021 but is expected to have about $10 million in 2022. So, $10 million in revenues versus TH with $80 million expected in 2022, 4.5x as much cash on hand as TH but negative free cash flow that is almost 10 times that of TH. TH has
more debt at $57.5 million in the convert versus their $39 million.
As you noted, MRSN's market cap is $336 million versus TH's $225 million. So, again, based on only a brief evalaution, it again looks like TH investors are getting the short end of the stick from a valuation perspective. But not long ago this comaprison was even worse as MRSN has fallen 73% in the last twelve months while TH is down 36%. XBI is down 30% over the last year.
It looks like MRSN has been more proactive in updating investors about the progress of its phase 1a escalation trial that THTX has been. The JP Morgan analyst referenced updates in June and September last year (there may have been others) along with this most recent one and these updates appear to be very comprehensive with a fair amount of relevant data revealed. TH has told me they have been more open about their phase 1a trial than most biotechs but that does not appear to be the case versus MRSN.
qwerty22 wrote: I was looking at this company because I think they are a good comparison to THTX. They are developing an ADC to a unique target primarily in ovarian and lung cancer.
It seems lately the program has been underperforming as described here
https://www.evaluate.com/vantage/articles/news/snippets/mersanas-upri-disappoints-again
although an analyst has a much rosier view
https://www.svbleerink.com/wp-content/uploads/2020/02/MRSN-Time-2B-Gr8.pdf
The SP is around $4 and market cap of $300-$400 million but the SP has been all over the place in recent years going as high as $27.
The biggest reason I'm posting is because that analyst report has a bit about the benchmark for approval in late line ovarian cancer. It's surprisingly low, their estimate an ORR of ~15%. It's certainly not this low for other cancers. Here's the bit from p17 of the report.
"Benchmark prOC response rates: dose expansion (1-3 prior therapies)
According to one KOL we spoke with, a response rate in prOC (1-3 priors) of ~20-25% and PFS of ~7 months would be viewed as a win. The KOL also added that the drug would need to demonstrate a manageable toxicity profile, which he believes XMT-1536 would certainly fit (based on the data to date).
A second KOL believes the historical experience in patients with 1-3 priors has been an ORR of ~15%, and his benchmark ORR would be any response rate with non-overlapping confidence intervals. According to this KOL, a point-estimate response rate in the dose expansion population (those with 1-3 priors) where a 95% confidence interval did not overlap with 15% would be considered the benchmark for new therapies.
The FDA’s recent guidance to IMGN (MP) indicates a response rate of ~12% is considered the benchmark for single agent chemotherapy in prOC patients treated with 1-3 priors (2L- 4L). IMGN is also developing an ADC, mirvetuximab soravtansine, which targets folate receptor alpha (FR-α) in prOC. IMGN’s registrational strategy for mirvetuximab soravtansine involves a single-arm, pivotal study (SORAYA) to support accelerated approval, with a confirmatory Phase III study (MIRASOL) comparing mirvetuximab to investigator’s choice chemotherapy. While MRSN had previously suggested that a single-arm study would support accelerated approval for XMT- 1536, the FDA’s decision to allow IMGN to pursue this pathway offers additional validation of this strategy. The SORAYA study will enroll ~100 patients and has a primary endpoint of ORR, and the FDA has provided to IMGN that the benchmark for single-agent chemotherapy in this setting would be 12% (IMGN Investor Call Transcript). IMGN provided that the 12% ORR was based on the Phase III AURELIA and CORAIL studies that included patients both nave to and previously treated with bevacizumab. IMGN has also pointed to the response rate of 31.4% observed in 70 patients from the previously failed FORWARD-I study who met the eligibility criteria for SORAYA. The XMT-1536 Phase I expansion study in prOC is enrolling patients at the same line of therapy (1-3 priors) as the SORAYA study (as well as some patients with 4 priors, regardless of platinum- status). However, it is important (from an efficacy standpoint) to consider that these patients are not selected for NaPi2b expression (as they would likely be for an accelerated approval study)."