MRUS - 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 the near-term partnership potential of Merus’ ( MRUS ) solid tumor candidates Zenocutuzumab (MCLA-128) and MCLA-129, which are also undergoing studies for breast cancer and 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 latter 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 Merus’ ( MRUS ) Monday’s close, stands ~10% lower than the stock’s current average target on Wall Street.

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