Merus stock rocketed to a six-month high — and hammered shares of rival Bicara Therapeutics — after unveiling promising new results for its experimental head-and-neck cancer treatment.
The company tested a combination of its drug, petosemtamab, with Merck's Keytruda in previously untreated patients with head and neck squamous cell carcinoma, or HNSCC. After a year, 79% of patients were still alive. That beat out Keytruda alone, with a 44% overall survival rate and 62% for Bicara's ficerafusp.
Analysts say Merus' combination could eventually become the new standard of care for these patients.
"We believe the results continue to support the best-in-disease profile of petosemtamab ahead of top-line results from one or both Phase III studies in 2026," William Blair analyst Matt Phipps said in a report. "With the company's potential blockbuster market opportunity in HNSCC, we continue to see significant upside potential to share prices."
Merus stock catapulted 32.6% to 55.14, while Bicara stock crashed 40.8%, closing the regular session at 9.27. Merck shares slipped a fraction to 77.60.
Merus Stock Surges On 'Unprecedented' Results
Petosemtamab's 79% overall survival rate is "unprecedented in frontline HNSCC," Leerink Partners analyst Andrew Berens said in a report.
At the median, petosemtamab recipients lived for nine months before their disease worsened. That beat out the median PFS of 7.4 months for ficerafusp patients, William Blair's Phipps said. Both companies noted patients who tested negative for human papillomavirus, or HPV, had a higher PFS. For ficerafusp recipients, that was 9.8 months. Merus only said that patient group lived longer than nine months.
Overall, 63% of patients responded to Merus' petosemtamab. That declined from 67% in last year's data release. But the complete response rate — the number of patients whose tumors completely disappeared — climbed to 14%.
Needham's Fadia says the results "meaningfully de-risk the Ph 3 trials." She raised her price target on Merus stock to 88 from 75 and kept her buy rating. She sees a 60% chance of Merus' petosemtamab eventually winning Food and Drug Administration approval.
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