Mersana Therapeutics bolstered by FDA lifting hold on cancer tests, but shares fall after brief pop

Mersana Thereapeutics Inc (NASDAQ:MRSN) received good news when the US Food and Drug Administration (FDA) lifted the partial hold on its cancer drug trial, initially boosting the stock by almost 11%, although the surge lost steam as shares stumbled on likely profit-taking by midsession Monday. 

Mersana and the FDA reached agreement on changes to the protocol, including increased monitoring as well as the exclusion of patients with advanced hepatic impairment. The XMT-1522 trial will begin with a once-every-four-week dose regimen. The Phase 1 protocol will evaluate XMT-1522 in patients with advanced breast and gastric cancer, and non-small cell lung cancer (NSCLC).

READ: Mersana Therapeutics shares plummet after FDA puts partial hold on key cancer drug trial

The trial had been put on hold after the death of a patient in July.

The other drug, XMT-1536, is also in Phase 1 clinical trials in patients with tumors such as ovarian cancer, NSCLC and other cancers.

“We are excited to resume enrollment on the XMT-1522 trial and to work with investigators to explore the full potential of both promising drug candidates in the solid tumor setting,” said Mersana CEO Anna Protopapas.

Analyst reacts positvely

A note to clients by Baird Equity Research said the news is “incrementally positive.”

“Overall, we are encouraged by rapid removal (less than 60 days) of the partial hold, and we reiterate our Outperform rating,” wrote analyst Michael Ulz.

Mersana Therapeutics is a clinical-stage biopharmaceutical company using its differentiated and proprietary ADC platforms to develop highly targeted drugs with the potential for increased efficacy and tolerability and expanded opportunities to deliver meaningful clinical benefit to patients.

The company is based in Cambridge, Massachusetts.

Shares of the company initially jumped nearly 11% on the news to a session high of US$15.93, but then lost ground to trade 15% lower at US$12.22. 

Story by ProactiveInvestors