JPMorgan Downgrades Mersana, Says Data Readouts Unlikely To Reverse Street Sentiment

Mersana Therapeutics Inc MRSN shares, which went public in March 2018, was hit with its first bearish rating Monday in the absence of any stock-impacting data readouts over the next 12 months.

The Analyst

JPMorgan analyst Jessica Fye downgraded Mersana from Neutral to Underweight and withdrew the previous $10 price target.

The Thesis

With $160 million pro forma cash and an enterprise value of $55 million, Mersana shares already reflect substantial market skepticism, Fye said in the Monday downgrade note. 

Upcoming data releases are unlikely to reverse the prevailing sentiment, the analyst said. 

Fye said she sees sufficient runway for Mersana to generate expansion cohort data for its lead asset XMT-1536, with the initial dose escalation readout in January signaling activity.

" ... Confirmation of durable benefit is what we think will be needed to drive the market to ascribe more value to this asset." 

Updated dose escalation data due in the second quarter — with a mix of doses, tumor types and NaPi2b expression levels — is unlikely to answer the question, let alone provide a strong read on the potential for success in future studies, the analyst said. 

The Price Action

Mersana shares were down 0.66 percent at $4.49 at the time of publication Monday. 

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