Triple Meeting – Merus drops as competition concerns hit

Merus looks like it will be first to market in a tiny niche, NRG1-fusion driven cancers, with its lead asset zenocutuzumab. But investors are clearly hoping for bigger things from an earlier project, the EGFR/cMet bispecific MCLA-129; unfortunately, data presented on this asset in a poster at the Triple Meeting sent the group’s shares down 10% yesterday. At issue is whether MCLA-129 can compete with Johnson & Johnson’s similarly acting Rybrevant, which is already approved for NSCLC driven by EGFR exon 20 insertions, and in combo studies for broader EGFR-mutant use. Data from MCLA-129’s phase 1/2 study looked worse than an earlier abstract, and in line with early results with Rybrevant. Across 18 evaluable patients with various cancers and EGFR mutations, there were two confirmed partial responses; a further unconfirmed PR is unlikely to be confirmed, SVB analysts noted. A dose-expansion portion of the trial will focus on, among other things, NSCLC with exon 20 insertions or cMet exon 14 skipping; the former will be tough to break into given Rybrevant’s presence but the latter could be attractive, since J&J has not pursued this use as rapidly, Stifel wrote. The question is whether another such niche could help justify Merus’s almost $1bn valuation.