Mersana's UpRi Shows Potential in Ovarian Cancer; Analyst Initiates Coverage with Buy Rating

Guggenheim Partners has initiated coverage on Mersana Therapeutics Inc MRSN with a Buy rating and a price target of $14.

Though it seems the initiation came at the wrong time since investors are jittery as the FDA issued a partial clinical hold pausing new patient enrollment in the company's UP-NEXT and UPGRADE-A ovarian cancer trials.

The analyst notes that Mersana is developing a proprietary antibody-drug conjugate (ADC) technology platform, which holds the promise to generate product candidates with potentially differentiated properties and pursue differentiated targets. 

It also notes that Upifitamab rilsodotin (UpRi) is MRSN's main near-term value driver.

The analyst says that investor sentiment on MRSN's stock improved significantly in recent weeks following positive disclosures from peer company Immunogen Inc IMGN.

But continued investor uncertainty around UpRi's potential in ovarian cancer provides additional meaningful upside opportunities. 

Guggenheim notes that UpRi is likely approvable if UPLIFT exceeds at least 20% ORR and five months mDOR.

Price Action: MRSN shares are down 58.2% at $3.99 on the last check Thursday.