Financial Performance - The company reported net losses of $24.1 million for Q1 2025, compared to $19.3 million for Q1 2024, with an accumulated deficit of $919.7 million as of March 31, 2025[151]. - Collaboration revenue decreased by $6.5 million, from $9.2 million for the three months ended March 31, 2024 to $2.8 million for the three months ended March 31, 2025[172]. - Net loss increased by $4.8 million, from $19.3 million for the three months ended March 31, 2024 to $24.1 million for the same period in 2025[171]. - Net cash used in operating activities was $29.3 million for the three months ended March 31, 2025, compared to $32.7 million for the same period in 2024[181]. - Total operating expenses decreased by $2.98 million, from $30.2 million for the three months ended March 31, 2024 to $27.3 million for the same period in 2025[171]. - Research and development expenses totaled $18.3 million for the three months ended March 31, 2025, a decrease of $0.3 million from $18.7 million in the same period of 2024[173]. - General and administrative expenses decreased by $2.6 million, from $11.6 million for the three months ended March 31, 2024 to $8.9 million for the same period in 2025[175]. Cash Position - As of March 31, 2025, the company had cash and cash equivalents of $102.3 million, which is expected to fund operations into mid-2026[151]. - Net cash provided by investing activities was $27.0 million in Q1 2025, a significant improvement from net cash used of $72.5 million in Q1 2024, primarily due to maturities of marketable securities[183]. - Net cash used in financing activities was $3.1 million in Q1 2025, down from net cash provided of $5.8 million in Q1 2024, mainly due to debt principal payments[184]. - The company anticipates increased cash expenditures related to ongoing development, clinical trials, and potential commercialization of product candidates[185]. - As of March 31, 2025, the company has borrowed $25.0 million under the New Credit Facility, with $5.2 million of principal repaid[180]. - The company may need to raise additional funds through equity offerings, debt financings, or strategic collaborations, with no assurance of success in obtaining sufficient funding[186][189]. Clinical Development - The ongoing Phase 1 clinical trial of Emi-Le has shown a confirmed objective response rate (ORR) of 31% among evaluable patients with "B7-H4 high" tumor expression, an increase from the previous 23% reported[144]. - The company plans to report initial clinical data from the expansion portion of the Phase 1 trial of Emi-Le in the second half of 2025[145]. - The company is currently enrolling patients in the dose escalation portion of the Phase 1 trial of XMT-2056, with initial pharmacodynamic data expected in 2025[145]. - The company has entered into a global collaboration with GSK for the co-development and commercialization of XMT-2056, which targets a novel HER2 epitope[149]. - The company is focusing on advancing the clinical development of Emi-Le and XMT-2056 while reducing research activities and internal pipeline development efforts[146]. Restructuring and Cost Management - The company has implemented a strategic restructuring plan, reducing approximately 55% of its employee base, expected to be completed by Q3 2025, incurring estimated costs of $4-5 million[146][147]. - The company has discontinued the development of upifitimab rilsodotin (XMT-1536) and completed the related restructuring by December 31, 2023[148]. - Significant external costs for manufacturing and clinical trials are incurred, with total research and development costs at $18.3 million for the three months ended March 31, 2025[162]. - The company expects to incur significant research and development expenses over the next several years as it continues clinical development and manufacturing efforts[166]. Market and Risk Factors - The interest rate on the New Credit Facility is sensitive to changes, with a principal balance of $19.8 million outstanding as of March 31, 2025[195]. - The company is exposed to market risk related to interest rates, but believes that a 100 basis points change would not materially affect the fair market value of its investment portfolio[194]. - There were no material changes to contractual obligations during the three months ended March 31, 2025[192].

Financial Data and Key Metrics Changes - The company ended Q1 2025 with $102.3 million in cash and cash equivalents, expecting to extend its cash runway into mid-2026 due to a restructuring plan [18] - Net cash used in operating activities for Q1 2025 was $29.3 million [18] - Collaboration revenue for Q1 2025 was $2.8 million, down from $9.2 million in the same period in 2024, primarily due to reduced revenue from collaborations with J&J and Merck KGaA [18][19] - Net loss for Q1 2025 was $24.1 million, compared to a net loss of $19.3 million in Q1 2024 [20] Business Line Data and Key Metrics Changes - Research and development expenses for Q1 2025 were $18.3 million, slightly down from $18.7 million in Q1 2024, with a portion attributed to non-cash stock-based compensation [19] - General and administrative expenses decreased to $8.9 million in Q1 2025 from $11.6 million in Q1 2024, reflecting lower consulting fees and employee compensation costs [19][20] Market Data and Key Metrics Changes - The company is focusing on the triple-negative breast cancer (TNBC) market, with ongoing clinical trials for its product EMILY, which targets B7-H4 expression [7][9] - The global TNBC revenues for Trodelvy are projected to exceed $1 billion in 2025, indicating a growing market opportunity [16] Company Strategy and Development Direction - Mersana announced a strategic restructuring plan that includes workforce reduction, elimination of internal pipeline development, and a focus on breast cancer for clinical development [5][6] - The company aims to generate important clinical data for EMILY from ongoing phase one dose expansion cohorts, with a focus on extending cash runway and prioritizing high B7-H4 expressing TNBC patients [6][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for EMILY, highlighting the potential for meaningful improvement over current standard care for post-Topo TNBC patients [11][17] - The company is preparing for upcoming clinical data presentations at ASCO, which are expected to provide further insights into the efficacy of EMILY [12][17] Other Important Information - The company has made protocol amendments to manage proteinuria in patients, which is a significant concern in ongoing trials [40][41] - The focus of expansion efforts will be exclusively on breast cancer, with no new expansion data expected for ovarian or endometrial cancer in 2025 due to resource prioritization [78] Q&A Session Summary Question: Can you expand on the high dose and safety updates? - Management clarified that the data shared at ASCO will focus on escalation and backfill, not expansion data [24] Question: How might ASCENT studies impact clinical development plans? - Management noted that the earlier use of Topo ADCs increases the post-Topo patient pool, which is a significant unmet need [33] Question: What types of patients were included in the recent response rates? - The two additional responses were from ACC1 patients, with further details to be shared at ASCO [42] Question: Are there additional dosing regimens being evaluated? - Management confirmed that the two doses currently in expansion are the only ones planned for now [47] Question: What are the expectations for the upcoming ASCO presentation? - Management emphasized that the ASCO presentation will focus on backfill and escalation data, with no expansion data included [49]

Financial Data and Key Metrics Changes - The company ended Q1 2025 with $102.3 million in cash and cash equivalents, expecting to extend its cash runway into mid-2026 due to a restructuring plan [17] - Net cash used in operating activities for Q1 2025 was $29.3 million [17] - Collaboration revenue for Q1 2025 was $2.8 million, down from $9.2 million in the same period in 2024, primarily due to reduced revenue from collaborations with J&J and Merck KGaA [17][18] - R&D expenses for Q1 2025 were $18.3 million, slightly down from $18.7 million in Q1 2024, with a portion attributed to non-cash stock-based compensation [18] - General and administrative expenses decreased to $8.9 million from $11.6 million in Q1 2024, reflecting lower consulting fees and headcount [18][19] - The net loss for Q1 2025 was $24.1 million, compared to a net loss of $19.3 million in Q1 2024 [19] Business Line Data and Key Metrics Changes - The company announced a strategic restructuring plan, including a workforce reduction of about 55 employees and a focus on breast cancer for its clinical development work [4][5] - The ongoing clinical trial for EMILI, a dolisatin B7-H4 ADC, is focusing on triple-negative breast cancer (TNBC) [6][10] - Preliminary data showed that among TNBC patients with B7-H4 high tumors who received four or fewer prior lines of therapy, the objective response rate (ORR) was 29% [9] Market Data and Key Metrics Changes - The global TNBC revenues for Trodelvy in 2025 are projected to exceed $1 billion, indicating a significant market opportunity [14] - Positive Phase 3 results for Trodelvy in frontline TNBC could expand the post-Topo-1 patient population significantly [14][15] Company Strategy and Development Direction - The company aims to extend its cash runway to support ongoing clinical trials and collaborations, focusing on generating data for EMILI [5][16] - The strategic restructuring is intended to prioritize resources towards the most promising clinical programs, particularly in breast cancer [4][5] - The company is considering a randomized pivotal trial for EMILI, which could provide a more robust regulatory pathway compared to single-arm trials [56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for Mersana, highlighting progress in enrollment for clinical trials and upcoming data presentations [16] - The management noted that the current clinical data suggests EMILI could represent a meaningful improvement over existing treatments for post-Topo-1 TNBC patients [10][11] - The management acknowledged the challenges posed by the competitive landscape but remains confident in the unique positioning of their product candidates [60] Other Important Information - The company has implemented new proteinuria management guidelines to mitigate treatment delays in clinical trials [12][41] - The upcoming ASCO presentation will focus on data from dose escalation and backfill cohorts, with no expansion data to be shared at that time [49] Q&A Session Summary Question: Could you expand on the high dose and safety updates? - The data shared at ASCO will not include expansion data, focusing instead on escalation and backfill [22] Question: How might ASCENT studies impact clinical development plans? - The expansion cohort is focused on post-Topo-1 TNBC, and the use of new agents may increase the patient pool in this category [32] Question: What types of patients were included in the recent response rate updates? - Both patients with B7-H4 high tumors were included, and further details will be shared at ASCO [42] Question: Are there additional dosing regimens being evaluated? - Currently, the focus is on the two doses being taken into expansion, with no new regimens planned [47] Question: What are the expectations for the upcoming ASCO presentation? - The presentation will focus on backfill and escalation data, with no expansion data included [49] Question: Can you provide more details on the B7-H4 expression cutoff? - The company anticipates that 40% to 50% of patients will be positive for B7-H4 expression [60]

[Business and Pipeline Update](index=1&type=section&id=Business%20and%20Pipeline%20Update) Mersana provided a positive update on its lead antibody-drug conjugate (ADC), Emiltatug Ledadotin (Emi-Le), presenting encouraging clinical data at ESMO Breast Cancer 2025, while advancing dose expansion cohorts for Emi-Le in TNBC patients and continuing progress on the XMT-2056 Phase 1 trial and collaborations - Updated clinical data for Emi-Le presented at ESMO Breast Cancer 2025 showed an increased confirmed objective response rate (ORR) of **31%** (8 of 26 patients) across all tumor types with B7-H4 high expression, up from **23%** previously reported[5](index=5&type=chunk)[6](index=6&type=chunk) Emi-Le Preliminary Efficacy in TNBC Patients (Intermediate Doses) | Metric | Patients with B7-H4 high (n=7) | Patients with B7-H4 low (n=11) | | :--- | :--- | :--- | | **Received ≥1 Prior Topo-1 ADC** | 100% (7/7) | 73% (8/11) | | **ORR** | 29% (2/7) | 0% (0/11) | | **Median PFS** | 16.0 weeks | 6.4 weeks | | **Median OS** | Not reached | 5.7 months | - The company is advancing patient enrollment in two dose expansion cohorts for Emi-Le in post-topo-1 TNBC, with initial clinical data expected in the second half of 2025[6](index=6&type=chunk)[9](index=9&type=chunk)[11](index=11&type=chunk) - The Phase 1 dose escalation for XMT-2056, a HER2-targeting ADC, is ongoing, with Mersana planning to present initial clinical pharmacodynamic STING activation data in 2025, and GSK holding an exclusive global license option for this candidate[13](index=13&type=chunk) - Mersana continues to support its research collaborations with Johnson & Johnson (Dolasynthen platform) and Merck KGaA (Immunosynthen platform)[14](index=14&type=chunk) [First Quarter 2025 Financial Results](index=3&type=section&id=First%20Quarter%2025%20Financial%20Results) For the first quarter of 2025, Mersana reported collaboration revenue of $2.8 million and a net loss of $24.1 million, with reduced R&D and G&A expenses, and expects its $102.3 million in cash and cash equivalents to fund operations into mid-2026 following a strategic restructuring - As of March 31, 2025, cash and cash equivalents were **$102.3 million**, which the company expects to support its operating plan into **mid-2026**, aided by a strategic restructuring announced on May 6, 2025[15](index=15&type=chunk) Q1 2025 Financial Performance vs. Q1 2024 (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Collaboration Revenue** | $2.8 | $9.2 | | **R&D Expense** | $18.3 | $18.7 | | **G&A Expense** | $8.9 | $11.6 | | **Net Loss** | $24.1 | $19.3 | | **Net Loss Per Share** | $0.19 | $0.16 | - The decrease in collaboration revenue was primarily due to reduced revenue recognized from agreements with Johnson & Johnson and Merck KGaA, partially offset by increased revenue from the GSK agreement[15](index=15&type=chunk) - Operating expenses decreased year-over-year, driven by lower headcount and related compensation costs, as well as a reduction in consulting and professional services fees[15](index=15&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Mersana Therapeutics, Inc.'s unaudited condensed consolidated financial statements, including balance sheet data as of March 31, 2025, compared to December 31, 2024, and the statement of operations for the three months ended March 31, 2025, compared to the same period in 2024 Selected Condensed Consolidated Balance Sheet Data (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash, cash equivalents and marketable securities** | $102,287 | $134,620 | | **Working capital** | $48,027 | $74,446 | | **Total assets** | $112,471 | $144,663 | | **Total stockholders' deficit** | $(30,868) | $(9,509) | Condensed Consolidated Statement of Operations (in thousands, except per share data) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | **Collaboration revenue** | $2,754 | $9,245 | | **Research and development** | $18,341 | $18,686 | | **General and administrative** | $8,925 | $11,560 | | **Total operating expenses** | $27,266 | $30,246 | | **Net loss** | $(24,123) | $(19,306) | | **Net loss per share — basic and diluted** | $(0.19) | $(0.16) |

Core Insights - Mersana Therapeutics is advancing its clinical-stage biopharmaceutical pipeline, particularly focusing on the development of antibody-drug conjugates (ADCs) for cancer treatment, with a significant emphasis on addressing high unmet medical needs in oncology [1][17] Clinical Development - The company is developing Emi-Le (emiltatug ledadotin), a B7-H4-directed Dolasynthen ADC, and has reported promising preliminary clinical data at the ESMO Breast Cancer 2025 conference, indicating an increase in the objective response rate (ORR) to 31% among evaluable patients with B7-H4 high tumors [2][4][6] - The ongoing Phase 1 clinical trial of Emi-Le is focused on triple-negative breast cancer (TNBC) patients who have received one to four prior lines of therapy, with significant progress in patient enrollment for both dose expansion cohorts [9][10] - The company plans to report initial clinical data from the expansion portion of the Phase 1 trial in the second half of 2025 [6][10] Financial Performance - As of March 31, 2025, Mersana reported cash and cash equivalents of $102.3 million, with net cash used in operating activities for the first quarter amounting to $29.3 million [14] - Collaboration revenue for the first quarter of 2025 was $2.8 million, a decrease from $9.2 million in the same period in 2024, primarily due to reduced revenue from collaborations with Johnson & Johnson and Merck KGaA [14] - The net loss for the first quarter of 2025 was $24.1 million, or $0.19 per share, compared to a net loss of $19.3 million, or $0.16 per share, for the same period in 2024 [19][24] Collaborations and Partnerships - Mersana continues to support collaborations with Johnson & Johnson and Merck KGaA, focusing on research related to its Dolasynthen and Immunosynthen ADC platforms [13][17] - GSK plc holds an exclusive global license option to co-develop and commercialize Mersana's lead Immunosynthen ADC candidate, XMT-2056 [12]

Core Viewpoint - Mersana Therapeutics is advancing its clinical-stage biopharmaceutical efforts with presentations on emiltatug ledadotin (Emi-Le), a B7-H4-directed Dolasynthen antibody-drug conjugate (ADC), at the upcoming ASCO 2025 Annual Meeting, highlighting its potential in treating cancers with high unmet medical needs [1]. Group 1: Presentation Details - Clinical data from the ongoing Phase 1 trial of Emi-Le will be presented, focusing on dose escalation and backfill cohorts across various tumor types [3]. - A "trial-in-progress" presentation will detail the design of the expansion portion of the Phase 1 trial, specifically targeting patients with triple-negative breast cancer (TNBC) who have undergone one to four prior treatment lines [5]. - An additional oral presentation will occur at the ESMO Breast Cancer 2025 Annual Congress, emphasizing TNBC clinical data from the same trial [6]. Group 2: About Emi-Le - Emi-Le is characterized by a precise drug-to-antibody ratio (DAR 6) and a proprietary auristatin payload, currently under investigation in a Phase 1 trial for solid tumors, including breast, endometrial, and ovarian cancers [7]. - Initial clinical data reported as of December 13, 2024, indicate that Emi-Le is generally well tolerated, with confirmed objective responses observed across all enrolled tumor types, including TNBC patients previously treated with a topoisomerase-1 inhibitor ADC [7]. Group 3: Regulatory Designations - The U.S. FDA has granted two Fast Track designations to Emi-Le for treating advanced or metastatic TNBC and advanced or metastatic breast cancer in patients with low or negative HER2 expression who have received prior topo-1 ADC [8]. Group 4: Company Overview - Mersana Therapeutics focuses on developing novel ADCs and has proprietary platforms for cytotoxic and immunostimulatory ADCs, generating a pipeline of product candidates aimed at treating various cancers [9][10].

Emi-Le is a B7-H4-directed Dolasynthen ADC with a precise, target-optimized drug-to-antibody ratio (DAR 6) and a proprietary auristatin payload with controlled bystander effect. This candidate is being investigated in a Phase 1 dose escalation and expansion trial in patients with solid tumors, including breast, endometrial and ovarian cancers as well as adenoid cystic carcinoma type 1. In the initial clinical data that were reported as of a December 13, 2024 data cutoff, Emi-Le was observed to be generally ...

Mersana Therapeutics, Inc. Q4 2024 Earnings Conference Call March 3, 2025 8:00 AM ET Company Participants Jason Fredette - SVP, IR Martin Huber - President & CEO Brian DeSchuytner - CFO & COO Conference Call Participants Yen-Der Li - Leerink Partners Charles Zhu - LifeSci Capital Paul Jeng - Guggenheim Andy Hsieh - William Blair Asthika Goonewardene - Truist Operator Good morning, and welcome to Mersana Therapeutics Fourth Quarter and Year End 2024 Conference Call. Currently all participants are in a listen ...

Company Performance - Mersana Therapeutics reported a quarterly loss of $0.11 per share, better than the Zacks Consensus Estimate of a loss of $0.16, representing an earnings surprise of 31.25% [1] - The company posted revenues of $16.36 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 154.92%, compared to revenues of $10.7 million a year ago [2] - Over the last four quarters, Mersana has surpassed consensus EPS estimates three times and topped revenue estimates two times [2] Stock Movement and Outlook - Mersana Therapeutics shares have declined approximately 63.4% since the beginning of the year, while the S&P 500 has gained 1.2% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is -$0.19 on revenues of $5.32 million, and for the current fiscal year, it is -$0.67 on revenues of $29.99 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Mersana belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Mersana's stock performance [5][6]

Financial Data and Key Metrics Changes - At the end of 2024, the company reported cash, cash equivalents, and marketable securities totaling $134.6 million, which is expected to support operations into 2026 [16] - Net cash used in operating activities for Q4 2024 was $19.3 million, a significant decrease from $32 million in the same quarter of 2023 [16] - Collaboration revenue for Q4 2024 was $16.4 million, up from $10.7 million in Q4 2023, primarily due to increased revenue from collaborations with J&J, Merck, and GSK [17] - Research and development expenses for Q4 2024 were $22.3 million, slightly up from $21.5 million in Q4 2023, with $1.7 million attributed to non-cash stock-based compensation [18] - General and administrative expenses decreased to $8.9 million in Q4 2024 from $10.1 million in Q4 2023, reflecting reduced employee compensation and consulting fees [18] - The net loss for Q4 2024 was $14.1 million, compared to a net loss of $19.5 million in Q4 2023 [18] Business Line Data and Key Metrics Changes - The lead ADC, Emily, reported a confirmed objective response rate (ORR) of 23% across all tumor types with high B7H4 expression, defined as an IHC score of 70% or more [7][9] - The expansion portion of the trial for Emily was initiated for patients with triple-negative breast cancer (TNBC) who have previously been treated with at least one TOPO1 ADC [8] - The company is exploring doses up to 95 mg/m² for Emily, with the top dose of 67.4 mg/m² being well tolerated in the expansion cohort [14][51] Market Data and Key Metrics Changes - The competitive landscape for B7H4 ADCs has shifted favorably for Emily, as a primary competitor, Pfizer, discontinued its B7H4 ADC candidate [12][40] - The company believes it is well-positioned in the B7H4 ADC space, being the most advanced in clinical development with positive efficacy data in the post-TOPO breast cancer setting [40] Company Strategy and Development Direction - The company is focused on advancing its lead candidates, Emily and XMT-2056, with ongoing clinical trials and collaborations [15] - There is an emphasis on the potential for Emily to be used in combination with standard care treatments, such as platinum chemotherapy, due to its favorable safety profile [41] - The company is also exploring additional indications for Emily beyond TNBC, given the clinical activity observed across various tumor types [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the clinical activity of Emily, particularly in a high unmet need population of TNBC patients [8] - The company is optimistic about its cash runway and operational plans, expecting to support its commitments into 2026 without relying on future milestone payments [16] - Management highlighted the importance of ongoing investigator interest and engagement in their clinical studies [13] Other Important Information - The company has made progress in its collaborations with J&J and Merck KGa, which are expected to contribute to its research and development efforts [15] - The company has amended its clinical trial protocol to mitigate proteinuria issues observed at higher doses of Emily [14][22] Q&A Session Summary Question: Progress on mitigating AST elevation and proteinuria related to Emily - Management indicated that AST elevation does not lead to meaningful dose delays and is a transient, reversible phenomenon [21] - For proteinuria, mitigation strategies such as ACE inhibitors are being implemented, allowing for dose reductions instead of delays [23] Question: Distribution of patients with prior lines of therapy in the expansion cohort - Management stated it is too early to determine the distribution of patients with fewer prior lines of therapy, but confirmed that patients with more than four prior lines are excluded [29] Question: Establishing the final biomarker cutoff for B7H4 high - Management expects the TPS score to capture roughly 40% to 50% of the TNBC population [34] Question: Competitive landscape and Pfizer's discontinuation - Management noted that the discontinuation of Pfizer's program has led to increased interest in their study, positioning Emily favorably in the market [54]