Latest news with #Merus'
CNBC
7 days ago
- Business
- CNBC
This biotech stock rallying on cancer treatment data has more room to run, analysts say
Analysts are closely watching Merus and see more upside ahead coming out of one of the biggest biotechnology conferences in the U.S. Merus shares shot up late last month following the release of promising Phase 2 data for a treatment for head and neck cancer. This has made the Netherlands-based company the talk of the investing set that flocked to Chicago for the American Society of Clinical Oncology's annual meeting , which concludes Tuesday. "They're first in class. We think they're best in class," said Matt Phipps, group head of the biotech equity research team at William Blair. "That's just kind of a combination that a lot of investors really want to be a part of." The stock has popped about 40% in the past month and rallied to a new all-time high on Tuesday. Still, multiple analysts interviewed by CNBC Pro said Merus can surge even higher — with one even suggesting shares can more than double from current levels given there are more catalysts on the horizon. MRUS 1M mountain Merus, 1-month Phipps said Merus' data overshadowed a similar report from Bicara Therapeutics , whose shares have tumbled 24% over the past month. He said Merus' release cemented itself as the best drug in combination with Merck 's Keytruda for head and neck cancer. Guggenheim analyst Michael Schmidt said similar success in Phase 3 data could more than double the value of Merus' shares. To be sure, he noted that investors should be prepared to wait between 12 and 18 months to see this upside given the schedule for data releases that can boost the stock. Beyond that, he said the same drug combination has potential for treating colorectal cancer. While Schmidt acknowledged that its not a major focus of investors yet, he said data from ongoing Phase 2 studies expected in the second half of 2025 is something to keep an eye on. Expectations for this, he said, are "very modest." "It's a stock that we have a lot of conviction on," Schmidt said. "We like this story a lot." Multiple analysts interviewed by CNBC said the name could also be an acquisition target from bigger-name biopharmaceutical companies, which could further drive upside. That can also help explain why Wall Street is so bullish. Every analyst polled by LSEG has a buy or strong buy rating, with an average price target suggesting 45% in upside ahead. "You want to buy it now," said BMO analyst Evan Seigerman, who called the company's data "really compelling." "This is the type of company that a large pharma company would want to acquire." Seigerman said the company has both "great" clinical data and is in an area with "unmet need," which is a combination that can make the stock a winner in what he described as a competitive sector. A boost to Merck? The treatment's success can also have knock-on benefits for Merck shares given the potential sales bump for Keytruda, according to Leerink analyst Andrew Berens. Berens said Keytruda is approved as a monotherapy, but only about 20% of patients respond to it, making the average time spent on the drug about few months. But used in conjunction with Merus' product, he noted that data shows that rate shoots up to the high 60% level and increases duration to nearly a year. "It's a win-win for Merck," Berens said. "This drug has its own activity," he said, "but it also means they can sell more of their flagship drug."
Yahoo
01-03-2025
- Business
- Yahoo
Analyst Forecasts Just Became More Bearish On Merus N.V. (NASDAQ:MRUS)
One thing we could say about the analysts on Merus N.V. (NASDAQ:MRUS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Following the downgrade, the most recent consensus for Merus from its 17 analysts is for revenues of US$42m in 2025 which, if met, would be a meaningful 17% increase on its sales over the past 12 months. Losses are supposed to balloon 29% to US$4.05 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$49m and losses of US$3.96 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase. Check out our latest analysis for Merus There was no major change to the consensus price target of US$86.19, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Merus' past performance and to peers in the same industry. The analysts are definitely expecting Merus' growth to accelerate, with the forecast 17% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Merus is expected to grow at about the same rate as the wider industry. The most important thing to take away is that analysts increased their loss per share estimates for this year. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Merus after today. Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Merus going out to 2027, and you can see them free on our platform here. Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
