Leerink launched coverage of Mersana Therapeutics (NASDAQ:MRSN) with an “outperform” rating and $23 one-year price target, representing an approximate $500-million valuation. The stock closed at $14.05 on July 21.
Mersana has developed a proprietary next-generation antibody drug conjugate (ADC) platform, which holds the promise to generate ADSs with differentiated properties, compared with currently available agents, writes analyst Michael Schmidt.
“While clinical proof-of-concept is still outstanding and the ADC space is competitive, we believe multi-target partnerships with Takeda and Merck KGaA validate Mersana’s approach and that Mersana has assembled a strong leadership team consisting of industry veterans that have generated a compelling pipeline and strategy,” he added.
Lead product candidate, XMT-1522, takes aim at the large HER2 market and Mr. Schmidt said the ADC appears differentiated from Roche's Kadcyla, based on preclinical data, which supports the ongoing Phase 1 clinical trial.
Phase 1 data, which are expected by the end of this year, represent a key de-risking event, given the “notorious tolerability challenges” many ADCs have faced historically, he added.
Mersana’s second product candidate, XMT-1536, is expected to enter clinical development in ovarian and lung cancer in early 2018.